Caterpillar Plowed Under by Market After Q4 Numbers

I'm not saying Caterpillar's quarter was the prettiest thing you've ever seen. No way. The economy has caused a lot of depressing declines for the business.

But guidance calls for an increase in sales in 2010. Management expects conditions to become more attractive as we get further away from the awful recession.

It's all about expectations, though. According to this Reuters piece, the company's call for $2.50 of per-share profit for the next fiscal year is way below projections of $2.71 per share. Oh, and the dreaded whisper number of $3 per share isn't helping things, either.

Well, I was bullish on Caterpillar back in October. I still am. When I look at the cash flow, and I consider the improving financial environment, I see opportunity for the company. Comparisons will most likely get easier, and there probably will be room for management to go beyond expectations.

Technically, the stock is challenged, you shouldn't think otherwise on that count. So, as a trade, Caterpillar wouldn't constitute a fun time.

However, with this stock, you get a 3% dividend yield, a solid brand name, and a good generator of cash flow. Caterpillar has pulled back from its 52-week high, making its shares worth an examination.

Disclosure: I don't own any company mentioned; positions can change without notice.