Veteran Investor Bought More Caterpillar (CAT) Stock on Weakness

Kevin Simpson, the founder and CEO of Capital Wealth Planning, bought more Caterpillar (CAT) stock on weakness recently, he told CNBC last week. Simpson is bullish on the company's upcoming leadership change.

Meanwhile, Morgan Stanley upgraded CAT stock to Equal Weight from Sell last week, citing valuation.

Why Simpson Is Bullish on CAT

On April 15, Caterpillar disclosed that its COO, Joseph Creed, would become CEO, effective May 1. Creed has been with the firm for 28 years. CAT's CEO, D. James Umpleby III, will remain with the construction-equipment maker as its Executive Chairman.

Creed is "well-positioned to lead Caterpillar into its next phase of growth," Simpson stated.

But CAT stock is only appropriate for longer-term investors, as it's likely to "grind" higher, rather than surge "quickly," Simpson believes.

Morgan Stanley's Upgrade

 On April 16, investment bank Morgan Stanley raised its rating on CAT to Equal Weight from Underweight. CAT stock sank almost 30% between mid-October and the investment bank's upgrade on April 16.

In addition to valuation, Morgan Stanley cited the company's long-term, positive catalysts as a reason for its upgrade.

Morgan Stanley trimmed its price target on the shares to $283 from $300.

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Disclosure: None. This article is originally published at Insider Monkey.