Hedge Funds Beat Analysts On Seeing Weakness In Mattel And Caterpillar, But They Disagree On Blackberry

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Lastly is Caterpillar Inc. (NYSE:CAT), the shares of which are down by over 2% today and by more than 30% year-to-date. Analysts at Jefferies lowered their price target on the stock to $63, right around the level they’re currently trading, and have a ‘Hold’ rating on it. Deutsche Bank also lowered its price target on the stock, though to a much healthier $80, while William Blair analysts downgraded it to ‘Market Perform’ from ‘Outperform’.

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The tumble today follows a steep slide on Thursday following the announcement that Caterpillar Inc. (NYSE:CAT) would layoff 10,000 employees. While layoffs are many times seen in a positive light by the market, as a means of cutting costs and improving operational efficiency, these particular layoffs were not received thusly, given their correlation with weak demand in Caterpillar’s heavy machinery and other segments.

Hedge funds were generally bearish towards Caterpillar, as while ownership increased to 30 from 28 during the second quarter, the value of their holdings dipped to $1.36 billion from $1.46 billion despite a 6% rise in the price of the stock during the April-to-June period. So much like with Mattel, hedgies appeared to be cashing out at the right time on strength in the stock, before an eventual third quarter collapse. In Caterpillar’s case, shares are down by about 25% in the third quarter. Michael Larson’s Bill & Melinda Gates Foundation Trust was not one of the investment firms abandoning the stock, as it held on to a position of 11.26 million shares, its third-largest holding.

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