Caterpillar a CATastrophe Waiting to Happen: The Bear Case

Caterpillar, Inc. (NYSE:CAT) is a CATastrophe waiting to happen (or so we think) for the following reasons:

1. Questionable revenue recognition practices between CAT & its foreign subsidiaries

2. 54% of CAT’s assets belong to Caterpillar Finance, yet management rarely mentions its existence. Shareholders don't seem aware of the Finance arm's existence.

3. CAT’s customers are slashing spending & are in cash conservation mode. Some are at risk of filing chapter 11. Take FCX for example which just announced it is reducing, deferring capital expenditures, and seeks asset sales.

4. 70% of sales...