Positioning political buying, disclosed 2026-09-28
Options put/call open interest 1.22, read 2026-10-27
Ethical does not pass the values gate
Price647.39 USD
Fair value800.85
Ethical score10.0/100
RatingAVOID
Our investment reviews on this name
2026-10-11Read Distribution821.58-21.2% to today ✓Accumulation gives way to Distribution
2026-10-02Read Accumulation821.58-21.2% to today Distribution gives way to Accumulation after an 8% slide in 9 weeks
2026-07-28Read Distribution888.73-27.2% to today ✓Markup gives way to Distribution with results news in the headlines
2026-07-02Read Markup904.28-28.4% to today First review on file: Markup
Our analytic regime reads on this name, dated and marked against the screened price. Small sample per name, and separate from the daily-framework accuracy on the Track Record page.
Caterpillar Inc. holds its Distribution at $647.39. The statistical read favours the sellers, held for 4 days.
As held on the ledger · 2026-10-29
Phase
Distribution · caution
Quantitative state
The statistical read favours the sellers, held for 4 days
Price at the screen
$647.39
Valuation
27.87 trailing · 19.87 forward price to earnings
Values screen
FAIL· score 10.0
Beta
1.58
The Workings
Five Screens, Shown in Full
Does not pass. Debt ratio
Test
Figure
Limit
What it means
Status
Business activity
Permissible
Core business clean
Its core business isn't built on prohibited lines: no gambling, alcohol, tobacco, weapons, or interest-based lending.
Pass
Debt load
43.95%
Below 33%
Interest-bearing debt is 44.0% of its assets, above the one-third ceiling the screen allows.
Fail
Interest-bearing cash
0.00%
Below 33%
Cash held in interest-bearing accounts and securities is 0.0% of assets, under the one-third limit.
Pass
Receivables
32.00%
Below 49%
Money owed to the company is 32.0% of assets, under the 49% limit.
Pass
Revenue purity
0.74%
Below 5%
Only 0.7% of revenue comes from non-compliant sources, under the 5% line.
Pass
Five checks adapted from AAOIFI screening standards: business activity plus four balance-sheet ratios. All five must pass for ethical clearance. Every figure is arithmetic on public accounts, not judgement.
The Ethical Read
Why It Falls Short, in Plain English
Caterpillar's business is in a permissible area, but its interest-bearing debt is about 44% of the company, well over the ~33% line, so it does not pass on the financial screens.
Read as at 2026-10-29. It updates when the underlying figures move, and past reads are kept below.
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What the Numbers Say It Is Worth
The Fair Value Range
Our analysis reads AVOID: it trades at roughly a 24% discount to our $800.85 fair value, moderate competitive moat, 24.00% revenue growth.
Fair value range in USD, drawn from the 2026-10-29 screen. The gold marker is the market price at the same screen. A 23.7% margin of safety to the base estimate.
Third-party analyst targets: 26 covering, consensus Buy. The average target sits +47% from the screen price.
Reading the gap · Both our model and the analysts see meaningful upside from here.
Price History & Projections
Where it has been, where the models see it going. History from market close data; projection points are our fair-value estimates and third-party analyst targets, dated to the 2026-10-29 screen.
Fair value and rating are our own model estimates; the Street's range reflects third-party analyst estimates. Analysis, not advice.
The Business, in Plain Words
Bulldozing Ahead with Rising Debts
Imagine the sight of a Caterpillar Inc. bulldozer at work on a construction site; powerful, indispensable, yet also a costly addition to a project's balance sheet. Caterpillar's financials are not too different, with the company boasting a 24% revenue growth and a 15% profit margin. However, this machinery giant's glaring issue is its debt, which has caused it to fail our ethical screen.
Why we're passing on Caterpillar despite its robust financial performance is straightforward: its debt ratio. With a forward P/E of 25.3x and a fair value just below its current market price, the high debt level puts a strain on the company's financial health, overshadowing its 57% return on equity and moderate moat. While the market consensus is bullish with a median target of $980, the ethical red flag is a concern.
Risks are manifold - the debt burden is high, and the industrial sector is cyclical. With peak earnings potentially being recorded, the low multiple could be a value trap rather than a bargain. Add to this the company's failure on our ethical screen due to its debt ratio, and it's clear that while Caterpillar may bulldoze through construction sites, it stumbles over our investment criteria. Analysis, not advice.
The risks · The things to watch: it already moves more than the market on an average day; it carries a real debt load, which raises the stakes if revenue slips.
Plain-English interpretation of our own screen data. Analysis, not advice.
Where & How to Trade
CAT trades on a US exchange. As a listed security it is accessible through almost any international broker offering its home market. New to this, or investing from abroad? Our guide to accessing global markets covers brokers, currencies and the practical steps.
The Dated Journal · Newest First, Never Edited
Every Entry, As Written
2026-10-29Distribution$713.38-3.0%Entry 23
The analysis reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 3.0% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows excellent risk-adjusted returns. Our composite framework grades it D, carrying a low risk profile. Technically it is holding around 8% above its long-term trend line with momentum reading oversold. Over the past year the shares are up 142%. Our forward projection puts the odds of a 10% gain over the next month near 35%. The street (26 analysts) rates it buy, with a mean price target of $920. It reported earnings in this window, a natural checkpoint for the thesis.
2026-10-28Distribution$735.64+0.0%Entry 22
The analysis reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows excellent risk-adjusted returns. Our composite framework grades it D, carrying a low risk profile. Technically it is holding around 8% above its long-term trend line with momentum reading oversold. Over the past year the shares are up 142%. Our forward projection puts the odds of a 10% gain over the next month near 35%. The street (26 analysts) rates it buy, with a mean price target of $920. It reported earnings in this window, a natural checkpoint for the thesis.
2026-10-27Distribution$735.64+0.0%Entry 21
The analysis reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows excellent risk-adjusted returns. Our composite framework grades it D, carrying a low risk profile. Technically it is holding around 8% above its long-term trend line with momentum reading oversold. Over the past year the shares are up 142%. Our forward projection puts the odds of a 10% gain over the next month near 35%. The street (26 analysts) rates it buy, with a mean price target of $920. It reported earnings in this window, a natural checkpoint for the thesis.
2026-10-26Distribution$735.64+0.0%Entry 20
The analysis reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows excellent risk-adjusted returns. Our composite framework grades it D, carrying a low risk profile. Technically it is holding around 8% above its long-term trend line with momentum reading oversold. Over the past year the shares are up 142%. Our forward projection puts the odds of a 10% gain over the next month near 35%. The street (26 analysts) rates it buy, with a mean price target of $920. It reported earnings in this window, a natural checkpoint for the thesis.
2026-10-25Distribution$735.64+0.0%Entry 19
The analysis reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows excellent risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 1% above its long-term trend line with momentum reading oversold. Over the past year the shares are up 142%. Our forward projection puts the odds of a 10% gain over the next month near 35%. The street (26 analysts) rates it buy, with a mean price target of $920. It reported earnings in this window, a natural checkpoint for the thesis.
2026-10-24Distribution$735.64+0.0%Entry 18
The analysis reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows excellent risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 1% above its long-term trend line with momentum reading oversold. Over the past year the shares are up 142%. Our forward projection puts the odds of a 10% gain over the next month near 35%. The street (26 analysts) rates it buy, with a mean price target of $920. It reported earnings in this window, a natural checkpoint for the thesis.
2026-10-23Distribution$735.64+0.0%Entry 17
The analysis reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows excellent risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 1% above its long-term trend line with momentum reading oversold. Over the past year the shares are up 142%. Our forward projection puts the odds of a 10% gain over the next month near 35%. The street (26 analysts) rates it buy, with a mean price target of $920. It reported earnings in this window, a natural checkpoint for the thesis.
2026-10-22Distribution$735.64+0.0%Entry 16
The analysis reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows excellent risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 1% above its long-term trend line with momentum reading oversold. Over the past year the shares are up 142%. Our forward projection puts the odds of a 10% gain over the next month near 35%. The street (26 analysts) rates it buy, with a mean price target of $920. It reported earnings in this window, a natural checkpoint for the thesis.
2026-10-18Distribution$735.64-10.5%Entry 15
The analysis reads distribution. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 10.5% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows excellent risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 45% above its long-term trend line with momentum reading neutral. Over the past year the shares are up 142%. Our forward projection puts the odds of a 10% gain over the next month near 35%. The street (26 analysts) rates it buy, with a mean price target of $920.
The framework has shifted from accumulation to distribution since the last review. Smart money appears to be selling into strength. Institutional holders may be rotating out. Price has moved down 0.0% since our last review. Ethical screening: FAIL. This security does not pass our values-based screening criteria. The risk-adjusted return profile shows excellent risk-adjusted returns. Our composite framework grades it C, carrying a low risk profile. Technically it is holding around 45% above its long-term trend line with momentum reading neutral. Over the past year the shares are up 142%. Our forward projection puts the odds of a 10% gain over the next month near 35%. The street (26 analysts) rates it buy, with a mean price target of $920.
Each entry above was written on its date, before the outcome. A journal you can prune is not a journal.
