Caterpillar Guidance ‘Flat-Out Wrong,’ Weiss Says

Caterpillar CEO Doug Oberhelman's prediction that there won't be a recession anywhere in the world next year is incorrect, Stephen Weiss of Short Hills Capital said Monday on CNBC.

On "Fast Money," Weiss reiterated his short position on Caterpillar.

"If you look at what he said, they still look faulty in their estimates in terms of how they base and how they budget. So he's looking at China to be 8½ percent next year," he said. "He was on CNBC earlier, and he said there'll be no recession anywhere in the world. That's just flat-out wrong."

On CNBC's "Squawk Box," Oberhelman said, "I don't predict a recession anywhere in the world at all in 2013, but Europe is the one where there are so many political unknowns it's hard to see how that's going to end up," he said, adding, "We sure see China past the bottom. I'm optimistic about China in 2013."

(Read More: Caterpillar Earnings Beat, Cuts Full-Year Outlook)

Weiss took issue with Caterpillar's forecast, which stated that the company would hit the same numbers, "plus or minus 5 percent."

China, he added, was a bigger challenge than the company might realize.

"They are getting killed in price-cutting in China. You can buy an excavator for $4,700 and ship it here," he said. "It's about half of what CAT is charging."

TheStreet CIO Stephanie Link thought the stock offered opportunity.

"This is classic low expectations, and we knew all the news today," she said. "Earnings, we knew were not going to be great. Revenues, they kind of already forecasted this out on Sept. 24 at their analyst day. They already said guidance was going to come down. That's a classic de-stocking cycle. That's exactly what's happening here. The stock's off 28 percent from its high. It's trying to get 7 times EBITDA vs. 12 times average."


Link said that she expected "gradual improvement" in the U.S. construction market, as well as growth from stimulus in Brazil and China over the next 12 months.

"We're buying it this morning, and I think that you're definitely going to get a pop because I think expectations are so low," she said. "I don't think this was any worse than feared, and so I can make a case for short-term, and I can make a case for long-term."

Trader disclosure: On Oct. 22, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Simon Baker is long AAPL; Simon Baker is long BAC; Simon Baker is long JPM; Simon Baker is long AMZN; Stephen Weiss is short CAT; Stephen Weiss is long CNX; Stephen Weiss is long C; Stephen Weiss is long BAC; Stephen Weiss is long AIG; Stephanie Link is long AAPL; Stephanie Link is long JPM; Stephanie Link is long SBUX; Stephanie Link is long CAT; Stephanie Link is long BA; Stephanie Link is long EMC; Stephanie Link is long IBM; Steve Grasso is long ACI; Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long AUO; Steve Grasso is long BA; Steve Grasso is long BTU; Steve Grasso is long CLF; Steve Grasso is long F; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long P; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long WYNN; Steve Grasso is long GOOG.

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