Cummins Inc (CMI): Today's Featured Industrial Laggard

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 industry lower today making it today's featured Industrial laggard. The industry as a whole closed the day up 0.1%. By the end of trading, Cummins fell $1.30 (-1.2%) to $111.12 on average volume. Throughout the day, 2,616,359 shares of Cummins exchanged hands as compared to its average daily volume of 1,822,800 shares. The stock ranged in price between $110.84-$113.36 after having opened the day at $113.00 as compared to the previous trading day's close of $112.42. Other companies within the Industrial industry that declined today were: Exide Technologies ( XIDE), down 20.6%, Cleantech Solutions International ( CLNT), down 12.2%, Hydrogenics Corporation ( HYGS), down 6.9% and China Ming Yang Wind Power Group ( MY), down 5.8%.
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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 $21.9 billion and is part of the industrial goods sector. The company has a P/E ratio of 14.9, below the S&P 500 P/E ratio of 17.7. Shares are up 3.8% year to date as of the close of trading on Thursday. Currently there are 7 analysts that rate Cummins a buy, no analysts rate it a sell, and 6 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, solid stock price performance, reasonable valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

On the positive front, OSI Systems ( OSIS), down 13.7%, UQM Technologies ( UQM), down 11.4%, Energy Recovery ( ERII), down 10.1% and NF Energy Saving ( NFEC), down 9.7%.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the industrial industry could consider SPDR Dow Jones Industrial Average ( DIA) while those bearish on the industrial industry could consider ProShares UltraShort Industrials ( SIJ).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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