1 Dow Stock That's Soaring

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Caterpillar (NYS: CAT) has been on a tear recently. The company's shares are up over 24% in 2012 alone, the Dow Jones Industrial Average's (INDEX: ^DJI) second-largest gainer over that time period (coming in behind Bank of America).Caterpillar continued its positive momentum today, up over 3% after releasing impressive fourth-quarter earnings.

Fourth-quarter earnings per share for the construction equipment giant rose to $2.32 from $1.47 a year ago, well above analyst estimates of $1.73. Caterpillar also struck an optimistic note for the year ahead. Chairman and CEO Doug Oberhelman said that he expects the company to set a new sales record in 2012, even despite the fact that construction activity in the United States and Europe -- two large markets for CAT -- is still depressed.

Caterpillar continues to expand globally as a way of driving growth. The acquisition of mining equipment manufacturer Bucyrus International last year expanded Caterpillar's presence in the rapidly growing mining segment in emerging markets. According to Bloomberg Industries, capital spending at "major" mining companies is expected to climb 25% in 2012.

Like Caterpillar, other manufacturing companies have been taking advantage of strong emerging market demand. Joy Global (NYS: JOY) has made a commitment to build service centers in India and Russia, which the company identifies as two "key emerging markets." Manitowoc (NYS: MTW) , the maker of cranes and food service equipment, has built a huge factory in Brazil that will help it take advantage of growing crane demand in the country.

Another positive for Caterpillar investors is its willingness to invest in research and development. The company struck an agreement with Westport Innovations (NAS: WPRT) last year to evaluate natural gas engine technologies as a way to power Caterpillar's large engines in the future. Caterpillar said that investments in capital expenditures and R&D will add cost in 2012 as well, but that "it's the right thing to do." With its technology and impressive emerging market strategy, this is a company that is poised to stay at the top of its game in 2012, and its shareholders will likely continue to be rewarded for that.

Caterpillar has had an incredible start to the year and looks poised for an impressive 2012, but our chief investment officer has picked out a different company that he believes will crush the market in the year ahead. To see this company, check out our brand new free report: "The Motley Fool's Top Stock for 2012." It highlights a company that is revolutionizing commerce in Latin America. You can get instant access to the name of this company by clicking here -- it's absolutely free.

At the time this article was published Brendan Byrnes owns no shares of any company mentioned above. The Motley Fool owns shares of Bank of America and Joy Global. Motley Fool newsletter services have recommended buying shares of Westport Innovations. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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