Caterpillar Inc.’s (CAT - Free Report) shares were sent reeling after reports surfaced that Federal agents had raided the corporate headquarters of one of the world's largest makers of construction and other heavy equipment. Consequently, the company’s shares dropped 4.8% to close at $94.36 yesterday. In fact, the stock suffered its worst loss in a day since June 24, 2016 when it had plunged 7%.
The agencies involved in the search included the Internal Revenue Service's (IRS) criminal investigation unit, the U.S. Department of Commerce Office of Export Enforcement and the Federal Deposit Insurance Corp.'s Office of Inspector General. The search was carried out at Caterpillar’s Peoria, IL, headquarters as well as facilities in East Peoria and Morton, IL, under a federal warrant.
In fact, Caterpillar’s share price has benefited since the victory of Donald Trump as investors expect his plans of big spending in infrastructure would boost Caterpillar’s revenues which had so far borne the brunt of weak mining demand.
Nonetheless, if the allegations against Caterpillar are proved true, this could have a substantial impact the company. Further, it could be restricted from bidding for federal contracts, which would be a big blow given that Caterpillar is touted to be one of the biggest beneficiaries from the infrastructure plan. For the time being, it will be it certainly have a negative impact on the company’s reputation and be an overhang on the stock till the investigations are concluded.
The Caterpillar stock’s one year return of 34.4% bore the impact of this announcement and has fallen behind the Zacks categorized Machinery – Construction/Mining sub industry’s gain of 42.3% in same time frame.
Caterpillar currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space include Altra Industrial Motion Corp. , ACCO Brands Corporation (ACCO - Free Report) and Milacron Holdings Corp. . All three of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Altra Industrial Motion has a positive average earnings surprise of 12.49% in the last four quarters. ACCO Brands generated a positive average earnings surprise of 24.74% in the trailing four quarters. Milacron has delivered an average positive earnings surprise of 9.23% in the last four quarters.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Caterpillar Inc.’s (CAT - Free Report) shares were sent reeling after reports surfaced that Federal agents had raided the corporate headquarters of one of the world's largest makers of construction and other heavy equipment. Consequently, the company’s shares dropped 4.8% to close at $94.36 yesterday. In fact, the stock suffered its worst loss in a day since June 24, 2016 when it had plunged 7%.
The agencies involved in the search included the Internal Revenue Service's (IRS) criminal investigation unit, the U.S. Department of Commerce Office of Export Enforcement and the Federal Deposit Insurance Corp.'s Office of Inspector General. The search was carried out at Caterpillar’s Peoria, IL, headquarters as well as facilities in East Peoria and Morton, IL, under a federal warrant.
In fact, Caterpillar’s share price has benefited since the victory of Donald Trump as investors expect his plans of big spending in infrastructure would boost Caterpillar’s revenues which had so far borne the brunt of weak mining demand.
Nonetheless, if the allegations against Caterpillar are proved true, this could have a substantial impact the company. Further, it could be restricted from bidding for federal contracts, which would be a big blow given that Caterpillar is touted to be one of the biggest beneficiaries from the infrastructure plan. For the time being, it will be it certainly have a negative impact on the company’s reputation and be an overhang on the stock till the investigations are concluded.
The Caterpillar stock’s one year return of 34.4% bore the impact of this announcement and has fallen behind the Zacks categorized Machinery – Construction/Mining sub industry’s gain of 42.3% in same time frame.
Caterpillar currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space include Altra Industrial Motion Corp. , ACCO Brands Corporation (ACCO - Free Report) and Milacron Holdings Corp. . All three of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Altra Industrial Motion has a positive average earnings surprise of 12.49% in the last four quarters. ACCO Brands generated a positive average earnings surprise of 24.74% in the trailing four quarters. Milacron has delivered an average positive earnings surprise of 9.23% in the last four quarters.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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