Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi Market Matters Team What's your view on CAT - You trimmed your exposure back to 4% on 27/10 - the SPP at $6.68 closed 5/11. The share price has fallen to low of $6.10 this morning. Trading around $6.20. For those who do not hold CAT - at what price would you consider CAT a buy? or has the opportunity been missed at this price? regards Debbie
Hi Debbie,
We continue to like the CAT business and stock but after surging 7-fold in less than 2-years chasing strength comes with obvious heightened risk. We’ve seen some huge retracements from a number of hot stocks/sectors in recent months although most have been in the cyclical commodities space. However, even with defence stocks such as DroneShield (DRO) the corrections have been far deeper than many had expected and we’re conscious that CAT is a high growth $1.8bn business with plenty of room for valuation contraction.
We continue to like everything about CAT except perhaps its rich valuation, but after it raised $120mn via institutional placement at $6.68, the stock should find support into weakness.
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