This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stock Under $10 that he thinks could potentially double or triple in the next 6 to 12-months. See what he's trading today with a 14-day FREE pass.

Jim Cramer: Time to Catch Caterpillar

NEW YORK (Real Money) -- Immunity? That's what it seemed like yesterday when Caterpillar (CAT) didn't go down on those hideous November sales or when Herb Greenberg delineated the misdeeds of CEO Doug Oberhelman.

I like Caterpillar here; it is a stock that we own for Action Alerts PLUS because we think that the downside is minimal and the upside (from a pickup in orders, a restructuring or a firing of the CEO) takes the stock to the mid-$90s in a heartbeat.

The main thing you need to know about Caterpillar is the calendar. We are in "hope springs eternal" limbo. We have no Fed to wreck us, no Washington to torture us, no companies left to preannounce.

This is fertile ground to dream that 2014 could be a big up year for the earth-moving giant that will cause people who say, OK, I missed the runs in Emerson Electric (EMR), Parker-Hannifin (PH), Deere (DE), Boeing (BA), Honeywell (HON), even General Electric (GE), so I am going to buy this laggard.

They will do so because it is well behind the market, heavily shorted, and you are going to get new adherents and new themes such as the Merrill Lynch analyst who came out this morning and suggested that Caterpillar be bought on compression sales related to shale exploration and the Gulf of Mexico. In other words, the metals and mining weakness, which is still very much there (as you can tell from the price of minerals around the globe), will be offset by other lines of business.

Let me say from the outset that I don't think this kind of logic is needle-moving to the earnings; it is just needle-moving to the stock. That means the purists and the dyed-in-the-wool shorts will battle it, but it will be to no avail. In fact, I think that, if history is any guide, the big battle for Caterpillar will be how to stay long it through what I believe will be a real run-up here into the quarter, which, unless the CEO is fired and a gigantic restructuring occurs, will cause the stock to be hammered.

That's right: I am predicting that Caterpillar breaks out here despite all of the badness because it didn't go down this time on retail sales. It always goes down on retail sales. That's how the run begins.

I think that it's the next big stock to take off here (the DJIA laggard, the dog of the Dow) and the question will be, How can you lose -- you get either a turn or a new CEO?

Works until it doesn't.

Random musings: Thanks for the kudos for those who have had a sneak peak at Real Money such as James Altucher, who did a trenchant series of interviews with me that will be posted on this site shortly.

At the time of publication,, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long CAT, EMR, HON and GE.

Editor's Note: This article was originally published at 7:51 a.m. EST on Real Money on Dec. 20.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
DOW 16,982.59 +22.02 0.13%
S&P 500 1,978.91 +0.57 0.03%
NASDAQ 4,444.9090 -4.6550 -0.10%

Our Tweets

Brokerage Partners

Top Rated Stocks Top Rated Funds Top Rated ETFs