Why This Investor Is Buying More Caterpillar Stock


Stephanie Link, chief investment strategist and portfolio manager at Hightower Advisors, tries to buy low and sell high and Caterpillar Inc CAT presents an opportunity to buy low, she said Tuesday on CNBC's "Fast Money Halftime Report."

What To Know: Caterpillar is down more than 25% from its highs and Link thinks "demand is going to be off the charts."

The stock is a restructuring and rising free cash flow story so margins should hold and the company is going to generate free cash flow of $1 billion this year, Link said.

Caterpillar is buying back $2 billion worth of stock, she noted. The stock is trading at a discount to the market at 19 times earnings and offers a more than 2% dividend yield.

Related Link: Price To Earnings Ratio Insights For Caterpillar

Why It's Important: Caterpillar's strong fundamentals show that pullbacks should be viewed as buying opportunities, she said.

"That is a good story to me," Link said. "That means when the stock breaks, that's a buying opportunity."

Link bought more Caterpillar stock as the broader markets sold off yesterday.

CAT Price Action: Caterpillar has traded as high as $246.69 and as low as $142.73 over a 52-week period.

The stock is up 0.18% at $191.16 at time of publication.

Photo: Rico S. from Pixabay.

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Posted In: Long IdeasMediaTrading IdeasCNBCStephanie Link
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