David MacLennan, a director at
Caterpillar (CAT), recently bought 500 shares. The buy increased his position by 10%, and came to a total cost of $168,195.
This is the director’s second buy of the year, following a 350 share pickup for just over $113,000 back in February. Otherwise, there has been one insider sale from a company Group President, following the exercise of stock options. Going further back, insiders were more likely to be sellers of Caterpillar stock.
Overall, Caterpillar insiders own 0.2% of shares.
The heavy equipment manufacturer has soared 62% in the past year.
Earnings have soared 47%, even as revenues have been flat. That means that even after the big run, Caterpillar trades at just 16 times earnings.
A multi-year boom in construction and infrastructure spending is underway, which should continue to push shares higher in the years ahead.
Shares have pulled back in recent weeks, in line with the overall market. However, the longer-term uptrend looks intact.
Action to take: Long-term investors may want to build a position in shares under $350, as a long-term holding. Caterpillar pays a 1.5% dividend, and has a history of growing that payout over time.
For traders, the July $370 calls, last trading for about $5.15, could see mid double-digit returns in the coming months as shares get back to their long-term uptrend.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
