In this segment of the Motley Fool Money podcast, host Chris Hill and Total Income's Ron Gross weigh in on the state of bellwether Caterpillar (NYSE:CAT), which broke a long streak of declining sales this time around. Yes, it also booked a big tax hit, but feel free to ignore that -- it's just the company cashing in on the Republicans' big corporate tax repatriation giveaway, which is saving it a fortune. They talk about where the growth is, what's to come, and what it all means.

A full transcript follows the video.

This video was recorded on Jan. 26, 2018.

Chris Hill: Fourth-quarter sales for Caterpillar rose 34%, but Caterpillar also took a tax hit to the tune of $2.4 billion. Ron, this is one of those bellwether stocks. Tell me what to think here.

Ron Gross: Don't worry about the tax hit. They had $16 billion in accumulated profits overseas, and under the new tax plan you're going to take a hit on it, but it's worth it. That's fine. These are really strong earnings. Broke a four-year streak of declining sales. Global economy is very, very strong right now. Revenue up 35% for the quarter, North America being the strongest part of that due to growth in heavy machines and aftermarket parts, but China and Asia Pacific also very strong. I liked what I saw from guidance. I think, as a bellwether, it bodes well for the global economy. They added 4,800 jobs in the U.S. last year, and of course we can see that in the very low unemployment rate, with many companies following suit.

The interesting part is, the stock actually didn't react the way you would expect it to. In fact, it was down shortly after this announcement, after having popped. And I'm going to blame it on the Trump administration in this case, because they put out some very confusing messages about their thoughts about the dollar, do we want a weak dollar or a strong dollar. And I think it had investors kind of whipsawing back and forth. And then you have good old profit taking, with the stock being up 70% over the last year. So the confusion plus profit taking led to a stock that sold off.

Hill: I was a little surprised by the reaction, too, in part because of, and you alluded to this, because of the guidance. I mean, this is a company that, when they start to ramp up guidance, they're making huge machines. Those are investments that are going to pay off years down the line. So it really seemed like things were looking good for them.

Gross: I think that sell off was a very short-term minded sell off. The stock is not cheap after being up 70% over the last year. You could buy stocks like Deere for cheaper multiples than you could with Caterpillar. But I think this is probably the beginning of stronger earnings.

Chris Hill has no position in any of the stocks mentioned. Ron Gross has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.