Caterpillar

Ohio-based Hixon Zuercher disclosed in an SEC filing on Friday that it sold 10,631 shares of Caterpillar (CAT 2.07%)for an estimated $4.5 million in the third quarter.

What Happened

According to a filing with the Securities and Exchange Commission released on Friday, Hixon Zuercher reduced its Caterpillar position by 10,631 shares during the third quarter. The estimated transaction value, based on the average closing price in the period, was approximately $4.5 million. The fund reported holding 10,776 Caterpillar shares worth $5.1 million at the end of the third quarter.

What Else to Know

This sale reduced the Caterpillar stake to 1.6% of Hixon Zuercher’s reportable U.S. equity portfolio.

Top five holdings after the filing:

• GSIE: $23.4 million (7.1% of AUM)
• GSLC: $12.1 million (3.7% of AUM)
• MSFT: $9.9 million (3% of AUM)
• NVDA: $20 million (2.9% of AUM)
• JPM: $9.6 million (2.9% of AUM)

As of Tuesday morning, Caterpillar shares were priced at $507.73, up nearly 29% over the year and outperforming the S&P 500’s nearly 13% gain.

Company Overview

Company Snapshot

• Caterpillar offers construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and related financial products and services.
• It generates revenue through equipment sales, parts and service contracts, and financial solutions such as leases and loans.
• The company serves construction, mining, energy, transportation, and industrial customers globally, with a diversified client base spanning multiple sectors.

Caterpillar is a global leader in the manufacturing of heavy equipment and engines, operating at scale with over $63 billion in TTM revenue. The company’s integrated business model combines equipment sales with aftermarket services and financial solutions, supporting customer needs across the full equipment lifecycle.

Foolish Take

Hixon Zuercher trimmed its Caterpillar (NYSE: CAT) stake in the third quarter, selling shares worth roughly $4.5 million just as the heavy equipment giant continues to navigate a soft patch in its construction and resource segments. The move follows Caterpillar’s latest earnings, released in August, which showed sales dipping 1% year-over-year to $16.6 billion and operating profit margin falling to 17.3% from 20.9% amid weaker price realization and higher manufacturing costs tied to tariffs.

Still, Caterpillar’s energy and transformation unit remained a bright spot, with sales rising 7% to $7.8 billion on robust demand from the power generation and oil and gas markets. The company also generated $3.1 billion in operating cash flow during the quarter and returned $1.5 billion to shareholders through buybacks and dividends.

This week, Caterpillar announced plans to acquire Australian mining software firm RPMGlobal for $728 million, expanding its footprint in digital mining solutions and automation. Caterpillar shares have climbed about 4% since the announcement.

Glossary

AUM (Assets Under Management): The total market value of assets a fund or investment manager oversees on behalf of clients.
Reportable AUM: The portion of a fund’s assets required to be disclosed in regulatory filings, often U.S. equities only.
Filing: An official document submitted to a regulatory authority, such as the SEC, detailing financial or operational information.
Position: The amount of a particular security or asset held by an investor or fund.
Top five holdings: The five largest investments in a portfolio, ranked by market value.
Outperforming: Achieving a higher return than a specified benchmark or index over a given period.
Aftermarket services: Support and products provided after the initial equipment sale, such as maintenance, repairs, and parts.
Leases: Contracts allowing use of an asset for a set period in exchange for regular payments.
Financial solutions: Services like loans, leases, or other financing options offered to customers to support purchases.
Diversified client base: A wide range of customers from different industries or sectors, reducing reliance on any single group.
Integrated business model: A strategy combining multiple related business activities—such as sales, services, and financing—within one company.
TTM: The 12-month period ending with the most recent quarterly report.

Fund said decision against Caterpillar and five Israeli banks due to their contribution ‘to serious violations of rights in situations of war and conflict’.

Norway’s $2-trillion wealth fund, the largest in the world, has divested from US construction equipment giant Caterpillar over the firm’s purported involvement in rights violations perpetrated by the Israeli military in Gaza and the occupied West Bank.

The Norwegian central bank said on Monday that it had decided to exclude Caterpillar from the fund, which it manages, “due to an unacceptable risk that the companies contribute to serious violations of the rights of individuals in situations of war and conflict”.

The fund also announced that it had divested from five Israeli banks, based on the recommendation of its council on ethics.

In a statement, the ethics council said that “bulldozers manufactured by Caterpillar are being used by Israeli authorities in the widespread unlawful destruction of Palestinian property”.

“There is no doubt that Caterpillar’s products are being used to commit extensive and systematic violations of international humanitarian law,” the council said.

It added that Caterpillar had “not implemented any measures to prevent such use” by Israeli authorities.

Prior to its divestment, the fund held a 1.17 percent stake in Caterpillar valued at $2.1bn as of June 30, according to fund data.

The five banks named in the fund’s statement were Hapoalim, Bank Leumi, Mizrahi Tefahot Bank, First International Bank of Israel and FIBI Holdings.

The ethics council said the banks excluded had, “by providing financial services that are a necessary prerequisite for construction activity in Israeli settlements in the West Bank, including East Jerusalem … contributed to the maintenance of Israeli settlements”.

“The settlements have been established in violation of international law, and their continued existence constitutes an ongoing breach of international law,” the council said.

Just last year, the International Court of Justice (ICJ) ruled that Israeli settlements built on Palestinian territory seized in 1967 should end “as rapidly as possible”, as they “have been established and are being maintained in violation of international law”.

Last week, 21 countries signed a joint statement condemning Israel’s plans to build an illegal settlement on a 12 sq km (4.6 sq-mile) tract of land east of Jerusalem known as “East 1” or “E1”.

The massive construction, which envisions 3,400 new homes for Israeli settlers, cuts off most of the occupied West Bank from occupied East Jerusalem.

Hailing the plan, Israel’s far-right finance minister, Bezalel Smotrich, said the extent of the settlement and its cutting into Palestinian territory would bury the possibility of a future Palestinian state “because there is nothing to recognise and no one to recognise”.

The Norwegian fund’s stakes in the five Israeli banks were valued at a combined $661m, according to fund data.

Caterpillar, Hapoalim, First International Bank of Israel and Bank Leumi did not immediately reply to emailed requests for comment by the Reuters news agency.

The fund had announced on August 18 that it would divest from six companies as part of an ongoing ethics review over the war in Gaza and the situation in the occupied West Bank, but declined at the time to name any groups until its stakes in the entities were sold.

The fund is invested in some 8,400 companies worldwide.