3. Caterpillar Inc. (NYSE:CAT)
Bill Gates’ Stake Value: $2,002,304,000
Percentage of Bill Gates’ 13F Portfolio: 8.71%
Number of Hedge Fund Holders: 53
Caterpillar Inc. (NYSE:CAT) is a California-based company with interests in heavy equipment manufacturing, as well as financial products and services. Caterpillar Inc. (NYSE:CAT) has featured on Bill Gates’ 13F portfolio since Q3 2012, and entering 2022, the hedge fund’s $2 billion stake in Caterpillar Inc. (NYSE:CAT) represented 8.71% of the total investments.
Caterpillar Inc. (NYSE:CAT) on January 18 declared a $1.11 per share quarterly dividend, which was distributed to shareholders on February 18. The company’s Q4 results were announced on January 28, and Caterpillar Inc. (NYSE:CAT) beat Wall Street consensus for both earnings and revenue by solid margins.
On March 11, Seth Weber from Wells Fargo initiated coverage of Caterpillar Inc. (NYSE:CAT) with an Equal Weight rating and a $231 price target. According to the analyst, Caterpillar Inc. (NYSE:CAT) is positioned to benefit from the hot construction, energy, and mining markets, however, he sees limited valuation upside.
According to the fourth quarter database of elite funds tracked by Insider Monkey, 53 funds held long positions in Caterpillar Inc. (NYSE:CAT), up from 46 funds a quarter earlier. Fisher Asset Management is a leading shareholder of the company, with a position worth $1.4 billion.
Here is what Oakmark Funds has to say about Caterpillar Inc. (NYSE:CAT) in its Q2 2021 investor letter:
“Having followed the company closely for north of a decade, Caterpillar is a name we know well. For much of its history, the operating efficiency of the company left much to be desired, but its underlying competitive position was rarely in doubt. A series of actions over the past decade (e.g., LEAN implementation, improved service mix, optimized manufacturing footprint) helped to narrow the gap between Caterpillar’s potential and its realized results, driving material margin expansion and strong share price performance. In our view, the company remains among the highest quality industrials in the market, but its underlying business is cyclical, which can translate to large swings in both performance and investor sentiment over short time periods. Our ability to focus on the long-term, sustainable earnings power of a business (rather than getting distracted by near-term fluctuations) is our most significant edge when investing in cyclical businesses. Due to the inherent volatility in Caterpillar’s end markets and operating performance, we suspect we’ll have a future opportunity to own this high-quality business at a more attractive price once the cycle turns and today’s enthusiasm wears off.”
