Back on April 30 in an Alert to subscribers, six short candidates were presented. The stocks in this basket were all suffering from flat to declining revenues and profits with less than bright near-term prospects. The largest and perhaps most widely known of the basket was Caterpillar (CAT). Today CAT confirmed our view, detailed in that alert, when it reported a 43% decline in profits and a 15.8% decline in revenues when compared to a year ago. CAT also went on to lower it full-year guidance.
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CAT was shorted in the Almanac Investor Stock Portfolio on May 10 at $88.62 and is still a viable short candidate as signs of accelerating global growth and mining sector improvement are still lacking.
By Christopher Mistal