Caterpillar Should Be $130 Stock: Pro Trader

We always ask the Fast pros if they’re putting their money where their mouth is. Trader Mike Murphy tells us he pulled the trigger on Caterpillar at $102.

The founder and managing partner of Rosecliff Capital thinks the stock is just too cheap to pass up.

With the stock down 13% since late February, Murphy thinks CAT is now oversold.

“Fears about a China slowdown are overdone,” he says. “Sure CAT’s month over month numbers show slowdown, but nothing as bad as what’s priced in.”

And he goes on to say, CAT is well positioned going forward.

“I give their management team a ton of credit for the fact that they’re expanding presence in China. That tells me they’re looking to increase market share.”

All told, Murphy believes CAT is ultimately at $130 stock. “We give them a 13 multiple,” he says. “I think there’s a lot of upside form here.”

Trader Josh Brown doesn’t share Murphy’s enthusiasm. “I like the company but I wouldn’t pull the trigger here – I don’t think enough money has come out of the space, yet.”

Materials and industrial stocks have led the market lower recently, amid the sell-off, and it sounds as if Brown thinks more selling is about to come.

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Trader disclosure: On Apr 11, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian is long AAPL; Jon Najarian is long GS; Jon Najarian is long INTC; Jon Najarian is long IBM; Jon Najarian is long HFC; Jon Najarian is long WNR; Jon Najarian is long RIMM; Jon Najarian is long SBUX; Jon Najarian is long RIG; Jon Najarian is long FSLR; Jon Najarian is long TSL ; Jon Najarian is long THOR; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long CIGX; Josh Brown is long AAPL; Josh Brown is long JPM; Josh Brown is long WFC; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long COP; Steven Weiss is long JPM; Steven Weiss is long CSC; Steven Weiss is long BRCM; Steven Weiss is long JPM; Steven Weiss is long BAC; Steven Weiss is short AAPL SHORT PUTS

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