In this clip from the Industry Focus: Energy podcast, Sean O'Reilly and Tyler Crowe talk about what makes Caterpillar (NYSE:CAT) such an appealing stock at the discount it's at now. Also, they look at a few reasons investors might not want to buy in, and how investing in energy is different from investing in consumer-goods companies such as Starbucks.

A full transcript follows the video.

This podcast was recorded on April 22, 2016. 

Sean O'Reilly: Given the indications that we might be at the bottom of this cycle, is this when you step up and pick up a few shares in some of these names?

Tyler Crowe: Caterpillar has certainly been on my radar for a little while. I've been watching and trying to figure out how they're going to handle their debt situation. They do have pretty large amounts of debt. They are a manufacturing company. If you were to compare Caterpillar and Starbucks, you'd be bewildered at the amount of debt that Caterpillar had, but then --

O'Reilly: Different service models.

Crowe: If you start looking at the heavy capital costs that are involved in building all this machinery and having large inventories that are going to last a very long time, you're not turning over a front-end loader in 12 days. It may take much longer for it to sell. You have pretty high inventories. They just have a higher debt capital structure. Just watching it and making sure that it's not having to blow out the bank during this downturn, which makes it look a little more promising than 12 months ago, when things were still rapidly declining -- watching it, are they going to have to make some drastic measures? They've made some labor cuts and they've certainly brought their operating costs down, but not enough. They haven't had to do the big, deep cuts that you'd assume somebody would have to do in a situation like this.