Caterpillar (NYSE:CAT) will be announcing results soon. consider this Bear Case Scenario as you ponder management comments. CAT is heavily exposed to the mining and resource extraction. Slowing Chinese economic activity and dropping commodity prices do not bode well. Cat holds a large global market share. However it lags Komatsu in China. As the Chinese become more aggressive in managing resource extraction projects they will specify the use of Komatsu and ignore CAT. The risks of state corporate involvement abound. If Komatsu proves its worth in other major projects CATs moat will be shrinking.
George Gutowski writes from a caveat emptor perspective.