An engine-maker like Cummins might not seem like a Green Week play, but the Columbus, Ind., company is ahead of its peers when it comes to emissions standards.
Cummins Engine has what Cramer called a clear technological advantage over the competition because CMI is designing engines that are years ahead of future emissions standards. Case in point: The company is already testing 2010-compliant on-highway engines.
In terms of fuel efficiency, Cummins’ engines are 6% better than Caterpillar [CAT 82.58
0.33 (+0.4%) 
]. That’s not the only area where CMI’s coming out on top. It’s taking share from CAT in other heavy-duty engines as well. Cummins is taking share from all its competitors, actually, as it’s now the largest supplier to Paccar [PCAR 46.985 0.245 (+0.52%) ].Trading at just 10 times earnings with a 21% long-term growth rate, which is half of CMI’s usual multiple. For that reason, Cramer said he thinks the stock could double.Here’s the play, though. Cummins reports before the bell on Wednesday, April 30. If Volvo’s latest quarter is any indication – remember, Volvo’s a truck company now, having sold its consumer vehicles division – CMI should do quite well. Cramer’s call: He said he thinks you should get in ahead of CMI’s earnings.
4 comments:
Hey Mark,
Great Blog and best of luck in your capital raising goals. CMI is up due to Bob Marcin of Defiance Asset Management comments in Barrons. He is a very smart value investor who manages about $600MM. He writes for realmoney.com- His other picks this week were WDC, TEX, COP, NBR and Sketchers.
All the best,
Brian
Thanks Brian for the heads up. I've been a RM subscriber for a long time so I am familiar with Marcin. I am glad to see it is up on something other than a Cramer rant.
Ha Ha.. No problem and I agree.. Any thoughts on GLW's earnings tomorrow?
Thanks,
Brian
I don't follow GLW too closely anymore.. but from all indications from macro world they should be doing fine. It is just hard to find real secular growth in tech nowadays >15% Corning is sort of a relatively safe, relatively low growth stock in my book. If fiber in the home ever takes off (Verizon FiOS) maybe their story changes.
Post a Comment