Jim Cramer Warns of a 36% Market Drop & Reviews These 9 Key Stocks

7. Caterpillar Inc. (NYSE:CAT)

Number of Hedge Fund holders: 62

Caterpillar Inc. (NYSE:CAT) is a leading manufacturer of construction and mining equipment, with its fortunes closely tied to global trade and infrastructure development. Cramer discussed the stock following a downgrade from UBS, explaining that the company is vulnerable to slowing world trade but may be worth considering if infrastructure spending returns. Here’s his remarks:

“UBS, good firm, they downgraded Caterpillar from hold to sell. So people are saying, well, there’s going to be a halt in world trade, a halt in construction. So you sell companies that are related to infrastructure. And I think what you’re struggling with here is, is Caterpillar buy at a certain point? Because maybe infrastructure comes back. But my problem is, I think you have to wait. And I know wait is just not what you want to hear. No one really wants to hear somebody come on air and say, I think you have to wait and see. But I think that’s the right thing, the right strategy to advocate. Well, I’m not going to tell people to sell Caterpillar too soon. Look, let’s say Caterpillar goes to 240. Can I tell people, hey, 240, you got to get back in? Are we using a 2007 paradigm, or are we using the other 5-20% declines? Because if it’s the other 5-20% declines, then you can’t sell. You might not have to buy. You can’t sell. “