It’s been a brutal year for investors in Caterpillar (NYSE:CAT). Shares of the world’s largest maker of heavy construction and mining equipment are down 10%, even though business is so good the company is set to have its best year ever.

The Dow component posted a 67% jump in second-quarter profit Wednesday. It beat Wall Street estimates by … wait for it … 26 cents a share.

And it did so with thunderous top-line growth, something that most companies are struggling with this reporting season. Forget global weakness or the stronger dollar. Caterpillar’s revenue increased 21% to $17.37 billion.

That exceeded analysts’ average estimate by a quarter billion dollars.

CAT is getting hammered by the great slowdown in the global economy. China and India are cooling. Brazil has stalled. Much of the eurozone is in recession, and the U.S. is too close to contraction for comfort.

But as CAT CEO Doug Oberhelman said in the earnings release: “This doesn’t feel like 2008.”

It’s hard to generate enthusiasm for a macro-economically sensitive stock like CAT in such an environment — not when residential and commercial construction is slowing around the globe and falling commodity prices make it  hard to see why miners would want to invest in new kit.

But it’s pretty clear that Wall Street isn’t giving CAT enough credit. Estimates are modeling a 2008 scenario, the stock is discounting for it, too, but no one has told CAT. The blowout top- and bottom-line numbers suggest analysts are too pessimistic — and the market is as well.

Yes, if the macro situation unequivocally deteriorates to a 2008 scenario or worse, any company that makes things like bulldozers could see the wheels fall off.

And no, CAT is not exactly covering itself in glory by asking hundreds of workers in Illinois to accept wage freezes and pension cuts — not when it’s forecasting record profits.

But as we said when we picked CAT as one of the Ten Best Stocks for 2012, fears of a slowdown, especially in China, were overdone, at least when it comes to the company’s share price.

Fear was trumping fundamentals — and still is.

“Caterpillar’s success in 2012 is occurring despite U.S. construction activity that remains depressed and well below the prior peak, the problems facing euro-zone economies and economic concerns in China,” Oberhelman said.

Sure, business could be better, but it’s much healthier than anyone thought it would be.

The strong second quarter allowed CAT to actually raise its full-year outlook. It expects to post record profits and then some. If CAT was a bargain at $90, it’s even more so now in the low $80s.

The stock trades at nearly 50% discounts to its own five-year averages on both a trailing and forward earnings basis, according to data from Thomson Reuters. By price/earnings-to-growth (PEG), which measures how fast a stock is rising relative to its growth prospects, CAT’s at a 70% discount to its own five-year average.

Heck, the stock trades at a 45% discount to the S&P 500, and yet the long-term growth forecast stands at 18%, while the broader market will be lucky to hit 11%.

The global slowdown has been more than reflected in the stock price. The sell-off is overdone. It may be too late for CAT to be a top stock of 2012, but it’s still a great pick for the long haul.

Dan Burrows is a contributor to CBS MoneyWatch and a veteran of AOL’s DailyFinance, SmartMoney and MarketWatch from Dow Jones.  You can reach him at dan.burrows@gmail.com and follow him on Twitter at @danburrows. He holds no individual securities.