Yeah it needs a couple more wins - but don't confuse volatility...

Yeah it needs a couple more wins - but don't confuse volatility with market sentiment.

CAT has always had a "liquidity" issue - which can drive volatility. This is because ownership is concentrated among insiders and a couple of large long term institutional holders.

Adir Shiffman - 28.24m shares
Ng Kar Wing - 21.43m shares
Shaun Holthouse - 21.38m shares
Van Der Griendt - 20.51m shares

Total insider ownership is 91.56m shares (or 48% of the company) + plus you still have Unisuper and Quest Asset collectively holding another 12%. So free float of the company is about 40%, probably even less. Given market cap is about $240m, means $100m is on free float - which is tiny. Normal daily vol for CAT is around 200-300k shares, these days you need a market cap (free float) of at least ~$1b so daily vol wouldn't be a big issue.

If you have a small cap manager looking after a $300m fund whose client is getting nervous about markets and wants to redeem and they have a small 1% position in CAT, it will take them about 30 days to exit the position if they were to apply the standard 1/3 selling of ADV. Given that is not feasible, and given all aussie small cap managers hunt in packs you won't see any buying support until the price shifts significantly.

Frankly I think that creates an opportunity if you have conviction in the stock and know the company/opportunity better than most.