Is Caterpillar Inc. (CAT) A Good Stock To Buy?

Now, specific money managers have jumped into Caterpillar Inc. (NYSE:CAT) headfirst. Citadel Investment Group, managed by Ken Griffin, assembled the most outsized call options position in Caterpillar Inc. (NYSE:CAT). The fund reportedly had $101.3 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also made a $42.2 million investment in the stock during the quarter. The following funds were also among the new CAT investors: Israel Englander’s Millennium Management, Benjamin A. Smith’s Laurion Capital Management, and Matthew Tewksbury’s Stevens Capital Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Caterpillar Inc. (NYSE:CAT) but similarly valued. We will take a look at Paypal Holdings Inc (NASDAQ:PYPL), General Motors Company (NYSE:GM), Metlife Inc (NYSE:MET), and Prudential Public Limited Company (ADR) (NYSE:PUK). All of these stocks’ market caps are closest to CAT’s market cap.

As you can see these stocks had an average of 46 hedge funds with bullish positions and the average amount invested in these stocks was $2.43 billion. That figure was $1.46 billion in CAT’s case. Paypal Holdings Inc (NASDAQ:PYPL) is the most popular stock in this table. On the other hand Prudential Public Limited Company (ADR) (NYSE:PUK) is the least popular one with only 9 bullish hedge fund positions. Caterpillar Inc. (NYSE:CAT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PYPL might be a better candidate to consider a long position.

Disclosure: none.