Caterpillar exceeds expectations: Too late to buy?

I can understand the market enthusiasm. Caterpillar is a stock that should take off once the economy gets back on solid footing. Investors don't want to take the chance of missing out on that train.

Now, you might get a little depressed reading through some of the tidbits in the earnings release. Yes, we are still in a glum financial time. However, take a look at the statement of cash flows. For the nine-month frame, Caterpillar generated over 30% more money from operations than it did in the comparable period. The dividend obligation was amply taken care of as well.

I believe management has got a handle, for the most part, on what the company needs during the downturn. I'm sure some things could have been dealt with in a better fashion, but Caterpillar is poised to benefit from the eventual return to macro-expansion. There's no question on that count.

Shares are very close to a 52-week high. In fact, Caterpillar hit a fresh high during Tuesday's intraday session. So, you have to wonder: are these earnings good enough to buy on? Well, Caterpillar did raise its 2009 profit guidance, and from a technical standpoint, the stock should continue its upward climb. Plus, it's dividend yield is, at 2.8% as of yesterday's final bid, still close to that attractive 3% level.

I hate buying high, though. If you can wait for a pullback, do it. Otherwise, at least have some cash on hand to average into a position. Caterpillar does look exciting, and it is definitely a worthy investment idea.

Disclosure: I don't own any company mentioned; positions can change without notice.