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Caterpillar, All The Bad News Baked In?

Caterpillar has been no stranger to the hardships caused by the economic crisis. In fact you might say the recession and Caterpillar are rather well acquainted.

According to the Financial Times, “In the first three months of this year, the company reported its first quarterly loss in 17 years. It has shed 26,000 jobs around the world in recent months, slashed executive pay by up to 50 per cent and cut its profit outlook in half.



As if that’s not bad enough - when the company reported earnings in April they said, sales of construction and mining machinery had tumbled 29 percent in the quarter, led by sizable declines in Europe, Africa and the Middle East as a result of lower commodity prices and lower oil production.

But maybe the firm's fortunes are starting to shift. Certainly oil prices have marched higher in recent weeks -- many commodities such as copper have too.

In fact, over the past 3 months shares have climbed almost 60% as you can see from this chart to the left.

Considering all the drama -- how should you play this stock?

It seems to me Caterpillar is ahead of itself, muses Guy Adami. I wouldn’t touch it here.

The stock is struggling with its 200-day moving average, adds Joe Terranove. Only if it breaks above $39.82 would I get long.

I think the play in the space is JoyGlobal, counsels Pete Najarian.

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Trader disclosure: On June 9th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (BTU), (MSFT), (NUE); Macke Owns (TGT), (AAPL), (AGU); Najarian Owns (BX) Call Spread; Najarian Owns (DELL) Call Spread; Najarian Owns (FCX) Calls & Put Spread; Najarian Owns (INTC) Call Spread; Najarian Owns (MCD) Call Spread; Najarian Owns (MOS) Put Spread; Najarian Owns (PALM) Call Spread; Najarian Owns (WNR); Najarian OWns (AMAT) Calls; Najarian Owns (FLR); Najarian Owns (JPM); Najarian Owns (NSM) Calls; Terranova Owns (TER), (XBI), (ABT), (RIMM), (BTU); Terranova Owns (BRCM) & (BRCM) Calls; Terranova Owns July Crude Oil Futures; Terranova Owns August Crude Oil Futues; Terranova Owns (MS) & (MS) Calls; Terranova Is Short (FCX) & (FCX) Puts; Terranova Owns (GENZ) & (GENZ) Calls; Terranova Owns (HES) & (HES) Calls; Terranova Owns (XOM) Call Spread; Terranova Owns (DIS) Call Spread; Terranova Owns (X) & (X) Calls; Terranova Owns (JPM) & (JPM) Calls; Terranova Owns (POT) & (POT) Calls; Terranova Owns (IBM) & (IBM) Calls