Stop Trading!: CAT's the Play on China Stimulus

Caterpillar’s the stock to own for investors looking to profit from the China stimulus plan, Cramer said during Monday’s Stop Trading!.

“When I hear stimulus, that means building,” he said. “When I hear building, that means CAT.”

While some on Wall Street might think commodities are the way to go, Cramer said that sector is “way too hard” in this environment. Hedge funds still looking to raise money for client redemptions are selling stocks related to copper, aluminum, even oil, forcing down the share prices of names like Fluor and Foster Wheeler.

But with infrastructure a major part of China’s plan, Caterpillar works as a pure play on construction.

Whether it’s another U.S. stimulus plan or China’s $586 billion initiative, “either way CAT’s going to get the orders,” Cramer said.

Cramer also recommended Family Dollar as a play on consumers’ need to pinch pennies during this downturn. He said that FDO is a better investment right now than 99 Cents Only Stores.

Jim's charitable trust owns Foster Wheeler.

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