ETFs For Caterpillar's Bucyrus Buy
It's turning into another "Merger Monday" thanks in part to news that Caterpillar (NYSE: CAT) will pay $8.6 billion for Bucyrus.
Caterpillar, the world's largest maker of mining and construction, it would appear, is looking to take advantage of increased global demand for coal as Bucyrus equipment often finds its way into the hands of coal miners.
So with that, the list of ETFs that will move on this news is somewhat obvious, starting with the...
1) Market Vectors Coal ETF (NYSE: KOL):
Bucyrus isn't even a top-10 holding in KOL and gets just a 3.87% allocation, but the idea here is that rival Joy Global (Nasdaq: JOYG) will move on news of the Bucyrus takeover and Joy Global is a top-10 KOL constituent with an allocation of almost 7.4%.
2) PowerShares Dynamic Mid Cap Growth (NYSE: PWJ):
This could be an ETF folks forget about when it comes to this deal, but Joy Global is one of this ETF's top-10 holdings.
3) Industrial Select Sector SPDR (NYSE: XLI):
Play Caterpillar through XLI, which devotes 4.3% to that stock. Another option to consider is the SPDR Dow Jones Industrial Average (NYSE: DIA), but that is a play on the entire Dow, so XLI may be more sensitive (and profitable) today on this news.
