Caterpillar Inc. (CAT): Is It Digging Itself a Deeper Hole?

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Strength in numbers
Joy Global Inc. (NYSE:JOY)
is the world’s second largest mining-equipment manufacturer, and it relies even more so on the coal industry’s health than Caterpillar Inc. (NYSE:CAT) does, with two-thirds of its sales coming from coal miners. It cut several hundred jobs late last year, and in its first-quarter conference call in February, the equipment manufacturer pointed to a 27% decrease in books, as original equipment orders dropped 30% and it saw aftermarket orders cut by a quarter.

Both Caterpillar Inc. (NYSE:CAT) and Joy Global Inc. (NYSE:JOY) have lost around 20% of their value over the past year, and the outlook for the industry seems bleak. Yet these are companies in cyclical industries, and the time to buy such stocks is when things look darkest. They might not have reached their nadir just yet, but they’re both becoming attractively priced, warranting their addition to your watchlist.

The article Is Caterpillar Digging Itself a Deeper Hole? originally appeared on Fool.com.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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