FBN’s Charles Payne, Divine Capital CEO Dani Hughes, Belpointe Asset Management Chief Strategist David Nelson, Veracruz TJM founder Steve Cortes and Penn Financial Group founder Matt McCall respond to viewers’ questions.
Caterpillar (CAT) rose Monday as President Donald Trump detailed his $1.5 trillion plan to improve U.S. highways, bridges, ports, tunnels and airports, but its gain was dwarfed by that of many of the other infrastructure companies.
The construction equipment manufacturer said last month on a conference call that the revenue boost from an infrastructure bill would be limited.
“We have not incorporated any impacts from a potential U.S. infrastructure bill on our outlook, and if one were passed, it would be positive,” Brad Halverson, chief financial officer of Caterpillar, said on the call. “But we were not expecting it to materially impact our 2018 results.”
The infrastructure program that Trump announced would deploy $200 billion in federal spending, with the balance financed by state and local governments as well as the private sector. The president made the announcement amid concern that government spending will widen the budget deficit and push bond yields higher.
With Caterpillar’s stock having climbed more than 50% in the past year, its shares are trading at 120 trailing earnings, compared with 15 for Nucor (NUE) and 16 for United States Steel (X). Yet Caterpillar’s shares are trading at 14 times forward earnings.
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