Jim Chanos, the hedge fund investor best known for his prescient bet against Enron, has a new company he's betting against: Caterpillar (CAT).
The founder of Kynikos Associates thinks that the industrial equipment maker will be a victim of a slowdown in commodities.
"I believe the commodities super-cycle built on the back of the Chinese construction boom is coming to an end," Chanos said before an audience at the CNBC Delivering Alpha conference in Manhattan on Wednesday.
Commodity prices have been mostly booming since 1990, but those prices should revert to historical means "with a viciousness" in the next 10 years, Chanos said.
Roughly half of Caterpillar's profits are tied to the capital expenditures of global mining companies, he explained. While there's been a general acknowledgement that global mining expenditures will decrease, it won't happen gradually, as most people have predicted, Chanos believes.
Chanos said the equipment maker's problems could be compounded by its accounting practices. He questioned the method Caterpillar used for marking recent acquisitions on its books. Caterpillar has already run into accounting troubles this year: The company took a $580 million write-down stemming from what it called accounting misconduct at a Chinese mining company it acquired in mid-2012.
Caterpillar's stock is down nearly 2% Wednesday following Chanos' short call.
Not all of Chanos' short bets have worked out as well as Enron. At CNBC's Delivering Alpha conference in July 2012, he told the audience he was betting against Hewlett-Packard (HPQ), the struggling printer and computer equipment company. Since then, its stock is up 39%.
Still, Chanos says he thinks his bet against HP will eventually be a winning one.
As markets around the globe remain steeped in red, one stock is bucking the trend: Hewlett-Packard (HPQ).
HP is riding the wave of Meg Whitman's turnaround plan. The CEO said she's "encouraged" by the results so far, but cautioned it will take some time.
The company reported earnings late Wednesday that topped notoriously low forecasts and issued an improved profit outlook. So, even though sales are still not quite up to par, MORECatherine Tymkiw - May 23, 2013 11:26 AM ET
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
The proverbial "they" say that the cream rises to the top. Well, "they" clearly haven't looked at the stock market this year.
Stocks are about to wrap up a stellar first quarter. The Dow has hit MOREPaul R. La Monica - Mar 28, 2013 1:47 PM ET
Investors continued to punish Hewlett-Packard (HPQ) Thursday, a day after the company issued a grim outlook for 2013.
Hewlett-Packard extended the previous day's decline, after getting hammered on Wednesday. The stock has had a rough year, sinking more than 40% so far. That makes HP the worst Dow (INDU) performer by far this year.
In fact, it's been a tough couple of years for HP as the company struggles to stay MORECatherine Tymkiw - Oct 4, 2012 12:47 PM ET
Dell is in a world of hurt.
The PC maker reported sales that missed forecasts and cut its outlook for the current quarter. The fact that Dell (DELL) beat earnings estimates was shrugged off by investors, who want to see the company ramp up its mobile efforts.
When it comes to the hottest mobile gadget, Apple (AAPL) is clearly the dominating force, with the iPad. Dell and its rival Hewlett-Packard (HPQ) need MORECatherine Tymkiw - Aug 22, 2012 11:10 AM ET
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.
Who needs to own a boring U.S. Treasury bond when you can buy an exciting tech stock and get a similar -- or in many cases, higher -- yield in the process?
Cisco Systems (CSCO) announced Wednesday MOREPaul R. La Monica - Aug 16, 2012 1:14 PM ET
Renowned bear investor Jim Chanos called Hewlett Packard (HPQ) "the ultimate value trap."
Chanos outlined his vision of how the inevitable death of the personal computer will affect the broader technology industry, but said Hewlett Packard was the company most precariously perched on the edge of obsolescence.
Hewlett-Packard has been hiding its research and development within its $37 billion worth of spending on acquisitions in the last few years, Chanos, president and MOREMaureen Farrell - Jul 18, 2012 3:14 PM ET
Running the fiscally challenged state of California might have been an easier task for Meg Whitman than trying to turn around Hewlett-Packard.
That's what she would be doing right now if she hadn't lost the Golden State gubernatorial race to Jerry Brown in 2010. Alas, she has to "settle" for the more lucrative but arguably more thankless job as CEO of troubled HP.
Hewlett-Packard (HPQ) shares are down nearly 25% this year, MOREPaul R. La Monica - Jun 27, 2012 1:00 PM ET
A whole lot of tech news after hours. A quick recap for you. Pandora reported a smaller-than-expected loss. The online music company also said that revenues topped forecasts. Shares of Pandora (P) surged more than 13% after hours. This is very interesting. The company has been a bit of a disappointment since it went public last year. To be honest, I know more people (me included) who complain about the MOREPaul R. La Monica - May 23, 2012 5:02 PM ET
Dell (DELL) is a disaster. Hewlett-Packard (HPQ) is expected to report a massive round of layoffs and more disappointing financial results after the bell. The PC is quickly becoming irrelevant in the eyes of investors as tablet mania rules the land.
So why is Microsoft's (MSFT) stock up nearly 15% year-to-date, making it the fifth best performer in the Dow Jones industrial average? A lot is riding on Microsoft's upcoming MOREPaul R. La Monica - May 23, 2012 8:31 AM ET
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