7. Cummins (CMI) manufactures diesel and natural-gas engines.
Quarter: First-quarter profit multiplied to $149 million, or 75 cents, as revenue inched up 1.6%. The operating margin jumped from 2.5% to 7%. Cummins has $1.1 billion of cash and $735 million of debt, equaling a debt-to-equity ratio of 0.2.
Stock: Cummins has more than doubled during the past 12 months, outpacing U.S. benchmarks. It sells for a price-to-projected-earnings ratio of 14, a 31% discount to its peer average. Its PEG ratio of 0.3 indicates a 70% discount to estimated fair value.
Consensus: Of analysts covering Cummins, 12, or 60%, advise purchasing its shares and eight recommend holding them. Credit Suisse (CS) offers a target of $100, leaving a potential return of 32%. UBS (UBS) expects the stock to rise 29% to $98.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV