Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
Cummins (
CMI) pushed the Industrial Goods sector lower today making it today's featured Industrial Goods laggard. The sector as a whole closed the day down 0.6%. By the end of trading, Cummins fell $2.24 (-1.9%) to $114.01 on average volume. Throughout the day, 1.4 million shares of Cummins exchanged hands as compared to its average daily volume of 1.6 million shares. The stock ranged in price between $113.85-$116.01 after having opened the day at $115.74 as compared to the previous trading day's close of $116.25. Other companies within the Industrial Goods sector that declined today were:
Ballard Power Systems (
BLDP), down 20.6%,
Vertex Energy (
VTNR), down 10%,
IntriCon Corporation (
IIN), down 8.1%, and
LSB Industries (
LXU), down 6%.
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Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, and engine-related component products. It operates in four segments: Engine, Components, Power Generation, and Distribution. Cummins has a market cap of $22.08 billion and is part of the industrial industry. The company has a P/E ratio of 13.4, below the S&P 500 P/E ratio of 17.7. Shares are up 6.2% year to date as of the close of trading on Wednesday. Currently there are seven analysts that rate Cummins a buy, no analysts rate it a sell, and eight rate it a hold.
TheStreet Ratings rates Cummins as a
buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, attractive valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the industrial goods sector could consider
Industrial Select Sector SPDR (
XLI) while those bearish on the industrial goods sector could consider
ProShares Short Dow 30 (
DOG).
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