5 American Stocks That Will Benefit from the New Cold War

3. Caterpillar Inc. (NYSE:CAT)

Number of Hedge Fund Holders: 45

Caterpillar Inc. (NYSE:CAT) is an American corporation that manufactures and markets construction and mining equipment, diesel and natural gas engines, and industrial gas turbines worldwide. Caterpillar Inc. (NYSE:CAT)’s defense products include diesel engines, automatic transmissions, Trojan combat engineering tank, Terrier combat engineering vehicles, tank transporters, armored personnel carriers, military trucks, and infantry fighting vehicles. American stocks like Caterpillar Inc. (NYSE:CAT) are attractive for investors amid times of war and strained geopolitical relations. 

Tigress Financial analyst Ivan Feinseth on September 30 maintained a Buy recommendation on Caterpillar Inc. (NYSE:CAT) but lowered the price target on the shares to $266 from $282, citing a re-rating of valuation. His 12-month target still reflects a potential total return with dividends of more than 60% from present levels, noted the analyst, who sees Caterpillar Inc. (NYSE:CAT) as well-positioned to benefit from continuous capital equipment spending, supported primarily by higher growth in the energy and mining sectors.

Among the hedge funds tracked by Insider Monkey, 45 funds were long Caterpillar Inc. (NYSE:CAT) at the end of Q2 2022, compared to 54 funds in the preceding quarter. Michael Larson’s Bill & Melinda Gates Foundation Trust is a prominent stakeholder of the company, with 7.35 million shares worth $1.3 billion. 

Here is what Diamond Hill Large Cap Concentrated Fund has to say about Caterpillar Inc. (NYSE:CAT) in its Q1 2022 investor letter:

“We also initiated a position in Caterpillar (NYSE:CAT), one of the world’s leading manufacturers of construction and mining equipment. It’s a company we know well, as we have owned it in our large cap portfolio for quite some time. Recent share price weakness provided an opportunity for us to add it to our large cap concentrated portfolio at an attractive discount to our estimate of intrinsic value. We believe Caterpillar stands to benefit from increased capital investment supported by a healthier/recovering end market environment, particularly in construction and mining.”