We recently published a list of Should You Buy the Dip and Follow Insiders into These 10 Stocks?. In this article, we are going to take a look at where Caterpillar Inc. (NYSE:CAT) stands against other stocks insiders were piling into recently.
After a turbulent week, stocks began recovering on Monday, with all three major indexes posting gains. The broader market index rose 0.64%, blue-chip stocks gained 0.85%, and the NASDAQ Composite, still in correction territory, closed 0.31% higher.
Early Tuesday, stocks began to decline again as investors focused on the Federal Reserve’s two-day policy meeting starting today. The key announcement for traders will come Wednesday when the Fed announces its interest rate decision, followed by a press conference with Fed Chair Jerome Powell. Since September, the Fed has cut interest rates three times and still, the broader market entered a correction.
Despite uncertainty from President Trump’s shifting tariff policies and geopolitical strategies, some analysts remain optimistic about AI’s future.
“We retain our view that there is more to go in stocks, and we keep our conviction in the long-term opportunities in stocks linked to both the artificial intelligence and power and resources transformational innovations,” UBS chief investment office said in a note Monday, according to CNBC.
Amid turbulence and uncertainty on Wall Street, looking at recent insider trades can provide valuable insights, as executives often have a deeper understanding of their companies. For example, when a CEO or CFO buys company stock, it may indicate strong confidence in the business’s future.
However, insider selling doesn’t always signal a lack of confidence. It could be due to personal financial needs or a desire to diversify investments. These sales are often made through pre-arranged plans, like 10b5-1 plans, to avoid any appearance of improper timing.
While insider activity can be informative, it’s important to consider it alongside the company’s financial health, market trends, and industry developments.
Our Methodology
We used Insider Monkey’s insider trading stock screener to analyze recent trading activities in several popular stocks. For each stock, we noted the number of insiders who recently acquired shares and the company’s market capitalization.
Our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds, focusing on insider trading and stock picks from hedge fund investor newsletters and conferences. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A construction crew operating a hydraulic shovel during a nighttime project.
Caterpillar Inc. (NYSE:CAT)
Number of Insiders Buying: 1
Market Capitalization: $163.76 billion
The fourth hot stock we decided to highlight in this list of 10 recent insider purchases is a manufacturer and seller of construction and mining equipment, industrial gas turbines, diesel-electric locomotives, Caterpillar Inc. (NYSE:CAT). The Irving, Texas-headquartered company operates through three main areas: Construction Industries, Resource Industries, and Energy and Transportation Industries. Caterpillar (NYSE:CAT) is also one of the top 10 stocks everyone is talking about.
On January 30, the company disclosed financial results for the full year 2024, revealing revenues of $64.8 billion, down 3% year-over-year. Operating profit margin was 20.2% in 2024, compared with 19.3% in 2023. Adjusted operating profit margin was 20.7% in 2024, compared with 20.5% in 2023. Full-year profit was $22.05 per share in 2024, compared with profit of $20.12 per share in 2023.
On February 4, one insider bought $36,557 worth of Caterpillar shares at a price of $367.57 per share. Currently, the stock trades at $342.64, having declined 5.55% since the beginning of the year, and 2.63% over the past 12 months.
Based on 16 analysts’ estimates, the average rating for Caterpillar (NYSE:CAT) stock is “Buy” and the price target is $383.8 per share. The average price target indicates a 12.01% upside from the latest price.
Overall, CAT ranks 4th on our list of stocks insiders were piling into recently. While we acknowledge the potential of CAT, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CAT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.