Is Caterpillar a good stock to buy? The construction equipment giant, Caterpillar Inc. (NYSE:CAT), has been the victim of an important robbery and downgrade. Allegedly, John R. Peters (50) retrieved pieces of different sizes from the company’s warehouses located at 2411 W Clark St, Peoria, IL. Currently, the individual is held against his will at the Tazewell County Jail charged with burglary and theft. It is calculated that Mr. Peters extracted parts from the firm in excess of $1 million. However, how the pieces were removed from the location remains a mystery.
The operation, according to Mr. Peters’ confession, has been ongoing for over three years. Since, Mr. Peters was fired by Caterpillar last February, but the operation had added a new disciple. Mr. Eliot J. Wells (35) has aided Mr. Peters for the last 18 months in the extraction and sale of the removed parts, and winnings are said to have been divided fifty-fifty.
According to the affidavit provided by the Tazewell County State’s Attorney’s Office, Caterpillar’s security found items being sold online through the eBay and PayPal portals. When the issue was furthered investigated, security personnel found the account was linked to Mr. Peters and the items were suspected to be stolen. At the time that Mr. Peters’ home address was raided by local police, sales are said to have reached $485,000. An additional $300,000 worth of items was retrieved from the same address.
The burglars were busted after Mr. Wells came into surveillance when raising suspicion after changing entering patterns to Caterpillar’s facilities. Mr. Wells was followed during one of his visits to the warehouse, and according to the same affidavit, the men exited the building with a heavier than normal bag. The medium was then loaded onto his truck to later visit Mr. Peters’ house. Two days later a custom made piece went for sale in the mentioned account with a great discount, and police raided the home a week later, on September 11th.
On another note, Baird Equity Research analysts have downgraded Caterpillar. The company is expected to perform weakly due to a lower demand for houses, and a slow moving mining industry. We believe the shares’ slight rebound balances risk and reward considering that 2014 growth is likely to remain subdued given continued headwinds in mining as well as low growth in construction equipment,” Dobre wrote in a note to investors Wednesday. Is Caterpillar a good stock to buy? Think twice.
Disclosure: Jodor Jalit holds no position in any of the mentioned stocks.