Q: Could you please provide your analysis of Caterplillar. Do you like it and believe that this stock can continue to outperform the broader market after a huge run in 2025, being the Best stock in DOW ?
We already own Finning International, having taken a 4% position, just before recent quarterly results.
Could you contrast the two companies from stability/growth/valuation perspective ?
Does it make sense to own both and if so, what would be a reasonable combined weighting for a Balanced like portfolio ?
Thank You
We already own Finning International, having taken a 4% position, just before recent quarterly results.
Could you contrast the two companies from stability/growth/valuation perspective ?
Does it make sense to own both and if so, what would be a reasonable combined weighting for a Balanced like portfolio ?
Thank You
5i Research Answer:
Both companies are mid-single digit top-line growers. While the companies face some similar drivers, they are a bit different in that Finning is essentially a distributor of Caterpillar equipment in select regions where CAT produces and sells the equipment globally. FTT trades at a cheaper valuation but arguably is a bit higher risk as they are less geographically diversified than CAT. Both are sensitive to general economic conditions. Both are solid companies but we would only really see the need to own one or the other and with the lower valuation at FTT we might side with this name over CAT.