Trade-Ideas LLC identified

Cummins

(

CMI

) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Cummins as such a stock due to the following factors:

  • CMI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $216.5 million.
  • CMI traded 20,756 shares today in the pre-market hours as of 8:14 AM.
  • CMI is down 9.2% today from Friday's close.

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More details on CMI:

Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, and engine-related components. It operates in four segments: Engine, Distribution, Components, and Power Generation. The stock currently has a dividend yield of 3.5%. CMI has a PE ratio of 12. Currently there are 7 analysts that rate Cummins a buy, 1 analyst rates it a sell, and 12 rate it a hold.

The average volume for Cummins has been 1.9 million shares per day over the past 30 days. Cummins has a market cap of $20.0 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.44 and a short float of 4.9% with 3.71 days to cover. Shares are down 21.7% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Cummins as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and growth in earnings per share. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 18.3%. Since the same quarter one year prior, revenues slightly increased by 3.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CMI's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.30, which illustrates the ability to avoid short-term cash problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Machinery industry and the overall market, CUMMINS INC's return on equity exceeds that of both the industry average and the S&P 500.
  • CUMMINS INC has improved earnings per share by 7.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CUMMINS INC increased its bottom line by earning $9.02 versus $7.91 in the prior year. This year, the market expects an improvement in earnings ($10.03 versus $9.02).

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