Overweight Caterpillar, the global trade bellwether, reported results yesterday that beat expectations despite sell-side pessimism that global softness had not been priced in to the stock. Of particular note was the…
Of particular note was the resilience in resource demand that was the source of both revenue and profit outperformance, as volume and price gains outweighed tariff-driven input cost increases and FX headwinds. The stock’…
Overweight With a pickup in oil prices in general and jet fuel prices in particular, a logical inference would be a decline in airlines’ earnings power (second panel). However, the revenue side of the equation has…
Last week’s release of traffic data showed further deterioration in freight volumes, the fundamental driver of pricing power, confirming our bearish thesis. Only four of the 20 commodity categories tracked by the…
Underweight We downgraded the S&P railroads index to underweight last month based on falling rail traffic leading railroad pricing power down from its recent highs. Last week’s release of traffic data showed further…
Caterpillar and, by virtue of its dominance of its subsector, the S&P CMHT index was at the front of the news cycle this week as an analyst downgraded CAT based on a belief that global growth had collapsed. The market largely…
Overweight Caterpillar and, by virtue of its relative dominance, the S&P construction machinery & heavy truck (CMHT) index were at the front of the news cycle this week as an analyst downgraded CAT based on a belief…
Overweight (Downgrade Alert) Last fall we felt all of the shoes had dropped in the S&P industrial conglomerates index: industrial conglomerate stalwart GE had cut their dividend to a token to $0.01 per share following…
Overweight Though the pure-play BCA defense index has retreated somewhat from the mid-2018 highs, our thesis remains solidly on the offensive. As a reminder, we have been overweight the pure-play BCA defense index since late-…
The Railroad Indicator and our Rail Shipment Diffusion Indicator, have continued to deteriorate, as well as total rail shipments which have now started to contract for the first time since the 2015-16 manufacturing recession…