Ann: CAT reports solid H1 performance, reaffirms FY18 guidance, page-62

I have decided to sell out of CAT after their profit results. I agree that they have a strong moat and good business and I like what they do. I also think their financials will improve and become better in the future.

I have reservations for XOS. They paid a lot for it and it looks like it is struggling.

Initially, I bought in thinking that CAT is a TECH type stock with the potential to scale and therefore warrants the tech style multiple. However, after observing their performance over recent quarters, I feel they are more like a consumer discretionary stock. Almost like a retail stock. Basically, how many units they can sell. To sell more, they need to spend more manufacturing, advertising, marketing etc. Its not like a software company where you build the product once and scale it 100X. XOS and their data could potentially change that, but I atm, I think there are easier opportunities.

GLTAH.