Caterpillar’s restructuring plan, while painful for shareholders, is a step in the right direction.

Caterpillar Inc. (CAT-NYSE) yesterday dropped by -6.27% on news that the company will cut 5,000 jobs by the end of 2016 and a total of 10,000 by 2018. At the end of June, the company's staff was just over 111,000 (data by The Wall Street Journal). Management will implement a plan to shrink in several directions. The aim is to reduce annual costs by $ 1.5 billion for the background of declining demand. Decreased by 10% and production areas. The expected revenues for 2015 are $ 1 billion lower than forecast at the beginning of godinata.Nay likely, this indicator will Caterpillar reported a decrease of -27% compared to 2012. Additionally, in 2016 expected decline in revenues to continue with further -5 %.

(Caterpillar Inc .: Beta = 1.54; 52W Range: 70.16 - 104.41; RSI (14) = 27.05;)

The downward trend will probably continue, although short-term recovery is possible correction after the initial negative backlash. On the other hand, Charley Grant (WSJ) wrote:  „еven so, the worst isn’t over.“

Despite the problems, CAT remained far from yesterday's "losers":

-52,87% for SIEN (NASD), Sientra, Inc., USA, Industry: Medical Instruments & Supplies.

-33,45% for PCO (NASD), Pendrell Corporation, USA, Industry: Business Services.

-19,83% for MPET (NASD), Magellan Petroleum Corporation, USA, Industry: Independent Oil & Gas.

JrTrader G.Hristov