Caterpillar Stock: Buy, Sell, or Hold?

Caterpillar (NYSE: CAT) stock will always divide investors. It's a highly cyclical stock with relatively volatile revenue and profit margins. While management is doing a great job of reducing the cyclicality in its business and raising its long-term margin trends, its revenue and earnings are still guided by its end markets, and that's where the heart of the debate will lie.

The following chart shows just how volatile Caterpillar's revenue, operating margin, and free cash flow (FCF) have proved over time. Given the company's end-market exposure to construction activity, mining and infrastructure spending, energy capital spending, transportation, and power, it's hardly surprising. These are end markets whose growth prospects often depend on the economy.

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Source Fool.com