Jim Cramer was shocked when the news that iconic industrial company Caterpillar's Peoria, Illinois headquarters was raided by Federal agents last week — but it didn't scare him off from recommending the stock.
"Accounting issues almost always equal sell, but in this rare case, I think Caterpillar's declines already bake in the potential problems and its business is getting so much stronger that I think the story is too good to ignore with the stock down at $92," the "Mad Money" host said.
The timing couldn't have been any worse, either, as Caterpillar's stock was on the verge of hitting $100 for the first time in two years. But when everyone from the IRS, to the FDIC and the Department of Commerce got involved, it traded down to $94.
On Tuesday, The New York Times followed up a story with details of accusations on tax and accounting fraud that were made against Caterpillar in a report commissioned by the government. That article sent the stock down to around $91, just below where it closed at $92 on Friday.
"What really kills me here, though, is that this federal raid on CAT's headquarters comes at a time when the company's actually doing quite well, with some favorable sales trends for the first time in ages," Cramer said.
Watch the full segment here: