Cummins (CMI) Could Gain on Strong Int'l Presence, Move to Nat Gas - Barron's
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Cummins (NYSE: CMI) is positive on the session amid positive commentary from Barron's late Tuesday.
Shares are going for about 12 times forward EPS expectations. Management has been cautious on results for this year, recently reiterating expectations, though earnings are expected to grow about 21 percent in 2014.
Truck engines generally account for the lion's share of Cummins sales and with the average age of vehicles moving higher (at 10 years or so), the company could see a boost in demand. Along with engines, implementation of new clear-air legislation around the globe will also benefit the company, which collaborates with Wesport Innovations (Nasdaq: WPRT) on more eco-friendly engines.
Cummins derives about 60 percent of sales from international markets and Barron's notes that it enjoys first-mover status in many emerging markets.
Risks include the drop-off of mining and energy customers, slowing growth in emerging markets, and the possibility that management is overly optimistic given sluggish demand in the U.S.
Should more companies move to adopt nat gas -- which is in abundance in the U.S. -- and emerging markets meet growth expectations of 5 percent this year, Cummins might just be the stock to power-up a portfolio.
Shares are up 0.4 percent Tuesday.
Shares are going for about 12 times forward EPS expectations. Management has been cautious on results for this year, recently reiterating expectations, though earnings are expected to grow about 21 percent in 2014.
Truck engines generally account for the lion's share of Cummins sales and with the average age of vehicles moving higher (at 10 years or so), the company could see a boost in demand. Along with engines, implementation of new clear-air legislation around the globe will also benefit the company, which collaborates with Wesport Innovations (Nasdaq: WPRT) on more eco-friendly engines.
Cummins derives about 60 percent of sales from international markets and Barron's notes that it enjoys first-mover status in many emerging markets.
Risks include the drop-off of mining and energy customers, slowing growth in emerging markets, and the possibility that management is overly optimistic given sluggish demand in the U.S.
Should more companies move to adopt nat gas -- which is in abundance in the U.S. -- and emerging markets meet growth expectations of 5 percent this year, Cummins might just be the stock to power-up a portfolio.
Shares are up 0.4 percent Tuesday.
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