Leader in components and heavy equipment Dow Jones caterpillar (CAT) just announced a new initiative with Luck Stone to pilot standalone solutions. CAT stock is now exploring a new buy zone as it gains a spot on the IBD Breakout Stocks Index.
December 15, Caterpillar announced partnership with Luck Stone at the scale of artificial intelligence in the aggregates industry and beyond. Luck Stone is the nation’s largest family-owned producer of crushed stone, sand and gravel.
The collaboration will deploy Caterpillar’s autonomous solutions at Luck Stone’s Bull Run facility in Chantilly, Virginia. Marking its first deployment in the aggregates industry, the alliance will expand Caterpillar’s self-driving truck fleet to include the Cat 777 100-ton class (90-ton class).
Seeking to accelerate artificial intelligence beyond mining, Caterpillar will implement its existing Cat MineStar Command for Hauling system at Bull Run Quarry on a fleet of 777G trucks. This will enable the company to gain a better understanding of quarry operations, tailor the next generation of standalone solutions specific to quarry and aggregate applications.
Caterpillar Mining Growth and Strong Demand
Caterpillar is the world’s leading manufacturer of construction and mining equipment, off-road diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.
Last year, the Deerfield, Illinois-based company generated $51 billion in revenue. In the third quarter, Caterpillar posted a 21% increase in sales to $15 billion.
Earnings indicators look solid, with Wall Street forecasting 48% earnings growth this quarter, matching the same increase in the third quarter. Analysts expect EPS growth of 28% for the full year.
Demonstrating institutional demand, CAT stock sports a “B+” accumulation/distribution rating while 78 funds with an “A+” rating hold shares.
In Stock checkCaterpillar ranks first in the Machinery-Construction/Mining group, with a 98 composite score. Joined by highly rated peers CNH Industrial (CNHI) and Terex (TEXAS), this group ranks very strongly at No. 7 among the 197 track IBD groups.
Artificial intelligence propels CAT stock to breakout
The CAT stock has shown strength since last month’s article in the ITN inventory analysis, take a place on the IBD Big Cap 20. After forming a cup pattern, Caterpillar traded sideways to form a flat bottom seen on a weekly chart. Procurement point is 239.95.
This price action is constructive and healthy, seen in contrast to the volatility and selling pressure in the stock indices. In particular, the relative force line reached a new high, confirming the stock’s resilience and leadership.
On Wednesday, Caterpillar rose nearly 3%, helping it carve out a new buying zone. Volume was 14% above average and significantly higher than the previous day.
While keeping an eye on the overall market, see if Caterpillar can build on its to burst in large volume.
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Follow Matthew Galgani on Twitter at @IBD_MGalgani.
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