5 High Quality Stocks to Buy According to Hedge Funds

In this article, we will take a look at some of the best 5 High Quality Stocks to Buy According to Hedge Funds. For deeper discussion and analysis, read 10 High Quality Stocks to Buy According to Hedge Funds. 

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5. Caterpillar Inc. (NYSE:CAT)

Number of Hedge Fund Holders: 86

On May 11, Evercore ISI analyst David Raso raised the price recommendation on Caterpillar Inc. (NYSE:CAT) to $1,103 from $878. The analyst reiterated an Outperform rating on the stock.

During the company’s Q1 2026 earnings call, Chairman and CEO Creed said Caterpillar now expected full-year 2026 sales and revenue growth in the low double digits. He also said the company was not expecting any material impact on its 2026 outlook at this stage, even with ongoing geopolitical uncertainty and higher energy prices.

Senior Vice President Kyle Epley said the company had lowered its estimate for full-year 2026 tariff costs to between $2.2 billion and $2.4 billion. That was down from the earlier estimate of $2.6 billion shared last quarter. He added that the company planned to increase efforts to offset tariff-related costs in the second half of the year.

Epley also said Caterpillar still expected restructuring charges of about $300 million to $350 million in 2026. The company’s capital expenditure forecast remained around $3.5 billion. He added that MP&E’s free cash flow was now expected to top the $9.5 billion reported last year.

Caterpillar Inc. (NYSE:CAT) makes construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives.