Business Proposal on "Present Caterpillar to an Investment Group and Convince Them to Invest in the Company"

Business Proposal 5 pages (1328 words) Sources: 7

[EXCERPT] . . . .

Caterpillar (Private Equity)

Caterpillar has a rich history in the United States as one of the remaining engineering and manufacturing firms from the immediate post industrial revolution. The monolith has obtained a global sphere of influence, and has products penetrating and obtaining market share throughout the world. Given the recent quantitative easing from the U.S. In the form of buying bonds that were outstanding, the fed created liquidity in the market and therefore flooded the market with dollars.

Subsequently, the inflationary pressure pushes stock prices higher as the value of the dollar has declined and therefore more dollars are needed to purchase a share of stock. To purchase the stock at its current price would be foolish given the inflationary effect. Caterpillar is an attractive company that should be purchased as an investment. However, the valuation of the company will price its assets at a premium given the cost of capital and the rate of inflation.

There are various ways of acquiring Caterpillar. Should the acquiring company use equity shares to purchase Caterpillar, the shares will likely trade at a premium to Caterpillar. Additionally, the acquiring company can use cash and equity as a combination along with issuing debt to acquire Caterpillar. Well, given the strength in the appreciation of the stock market and the positive sentiment to market conditions, the unwillingness of the market to give up returns as a function of inflation, the equity price of Caterpillar is likely to rise higher and therefore an acquisition target price of $90 USD to $115 USD is advised. The equity value is likely to retract from its current trading pattern to allow for buying opportunities in this range.

Abstract

Caterpillar is a global supplier of heavy machinery such as tractors and augers that are used at building development sites for construction purposes. The company facilitates the supply of high quality machinery to assist in the various construction projects associated with commercial and residential building development, parking garages, and similar construction projects.

Caterpillar profits have taken a dip over the recent year of operations however strong global demand is expected to lead to growth for the company over the long-term. The stock price has not reflected the weakness in the global market nor the lack of positive sentiment in the markets as well as in industry. Caterpillar continues to pay a high dividend and invests its retained earnings into R&D.

Company background

Caterpillar is a 20th century company with 19th century beginnings and ties to the late period of the American Industrial Revolution. The company was forged in 1925 by two conceptual thinkers whom envisaged the vision of what would become known as the Caterpillar Company (CAT, 2011). The men, Benjamin Holt and Daniel Best, were engineering and manufacturing professionals that had an extreme commitment to quality, innovation and customer value (CAT, 2011).

"The Holt Manufacturing Company and the C.L. Best Tractor Co. merge to form Caterpillar Tractor Company" (CAT, History, 2011) The merger of these two companies amalgamated the two businesses into one unified firm that manufactured "tractors, motor graders, generators sets and a special engine for the M4 tank." (CAT, 2011) The major customer of the newly formed firm in the early period was the U.S. government to which Caterpillar provided parts and machinery to feed the proverbial 'war machine' during World War I and World War II.

The second half of the 20th century poised Caterpillar for further growth as the global market expanded into the foreign markets to include Asia and Asia-Pacific. A joint venture between Caterpillar and Mitsubishi was formed to concentrate on pursuing Caterpillars interests in Japan (CAT, history, 2011)

The early 1980s was a period of a global recession that affected CAT's global operations (CAT, history, 2011), "costing the company the equivalent of $1 million a day and forcing it to dramatically reduce employment." (CAT, history, 2011) Although periods of recession were somewhat cyclical throughout the history of Cat, except for the period between 1929 & 1933, CAT… READ MORE

How to Reference "Present Caterpillar to an Investment Group and Convince Them to Invest in the Company" Business Proposal in a Bibliography

Related Business Proposals:

Investing in a Company Thesis

Investing in a Company

The Coca-Cola Company and PepsiCo are the two major competitors in the global non-alcoholic beverage market. The two firms both have similar origins at soda fountains… read more

Thesis 5 pages (1410 words) Sources: 2 Style: APA Topic: Business / Corporations / E-commerce

---

Investment Management After Holding a Meeting Essay

Investment Management

After holding a meeting with our client named Robins Hewins on the January 1st 2007, our organization presents the client the best performing portfolio that we believe will… read more

Essay 8 pages (2195 words) Sources: 11 Style: Harvard Topic: Economics / Finance / Banking

---

Investment Valuation Company Overview Wal-Mart Stores Inc Research Paper

Investment Valuation

Company Overview

Wal-Mart Stores Inc. (NYSE: WMT) is the largest retailer in the world. They operate in the discount segment of the mass merchandising category of retail, which… read more

Research Paper 9 pages (2461 words) Sources: 5 Style: APA Topic: Business / Corporations / E-commerce

---

Group Processes: 12 Angry Men the Movie Data Analysis Chapter

Group Processes: 12 Angry Men

The movie 12 Angry Men may be one of the most comprehensive studies of group processes in the history of American cinema. Most people are… read more

Data Analysis Chapter 3 pages (1078 words) Sources: 1+ Topic: Law / Legal / Jurisprudence

---

Group Counseling Attitudes and Perspectives of Clients Research Paper

Group Counseling

Attitudes and Perspectives of clients who Are Involved in Cancer Care Group Counseling

Organization of the Research

Group Counseling

Quality of Life

Group Counseling

Chapter-III Research Methodology

Grounded… read more

Research Paper 19 pages (5248 words) Sources: 20 Topic: Psychology / Behavior / Psychiatry

---

View 100+ more related papers  >>