Munger Mode rating: 3 out of 5 — Hold. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
Written in the voice of Warren Buffett and Charlie Munger, from the Q2 2026 Form 10-Q (period ended June 30, 2026, filed August 2026) and current market data. Caterpillar is the finest heavy-equipment franchise in the world, and after nearly a century of watching it, we can say that with some confidence. It has a distribution moat nobody has ever replicated, an installed base that throws off high-margin parts revenue for decades after each machine is sold, and a management culture that has become genuinely excellent at capital allocation. The second quarter of 2026 was the best in the company's history: $20.5 billion of revenue (up 24%), a 20.9% operating margin, $7.77 in GAAP earnings per share (up 68%), and a $72 billion backlog — up 92% in a year — driven by an extraordinary boom in power generation for AI data centers. And yet.
Recent filings analysed: 8-K (2026-09-01), 10-Q (2026-08-05), 8-K (2026-08-04), 8-K (2026-06-11).
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