Cummins (CMI)

[winston]

OUR "HIGH HORSEPOWER" INDICATOR RIPS HIGHER

Our "high horsepower" economic indicator just "broke out"… in grand fashion.

Longtime DailyWealth readers know we follow a handful of vital companies, commodities, and investment funds for a "real world" take on the global economy. One of these companies is Cummins (CMI)… the world's largest independent manufacturer of the diesel engines that power bulldozers, heavy trucks, cranes, generators, and mining shovels. Its share price rises and falls with the pace of economic and infrastructure activity.

For example, we raised a red flag after CMI's big breakdown in January 2008, which came well before the economic crisis. This week, however, Cummins didn't break down… It struck an all-time high. The company just reported terrific earnings… driven chiefly by booming international markets like China, Brazil, and India.

When we see this "super strength" from the likes of Cummins, we say, sure, there are threats facing the global economic recovery right now (government debt and government debt being the two biggest)… but as long as companies like CMI are enjoying surging profits and share prices, things "can't be all that bad"…

Source: Daily Wealth

[winston]

OUR HIGH-HORSEPOWER INDICATOR RAISES A RED FLAG

Like China bellwether Baidu and fad shoe play Skechers, our "high horsepower" economic indicator stock is getting laid low right now…

Regular DailyWealth readers know we monitor shares of Cummins (CMI) for an "instant read" on the global economy. Cummins is the world's largest independent maker of high-horsepower diesel engines… the kind that power bulldozers, cranes, heavy trucks, mining shovels, and electrical generators. This makes its share price rise and fall with the pace of economic and infrastructure activity.

For example, we noted the stock's big breakdown in January 2008, which came well before the economic crisis. Post-crisis, though, Cummins has soared… And as long as this bellwether was soaring, we had to say things couldn't be "all that bad." But lately, Cummins hasn't been soaring… It just staged a downside breakout and struck a six-month low.

It's too early to say this weakness is signaling an impending economic bust. But consider our "trend antennae" raised. As the world economy goes, so go the profits and share price of Cummins. And right now, Cummins is going down.


www.dailywealth.com

[winston]

Not vested

WHY WE SAY "THINGS CAN'T BE THAT BAD!"

It didn't take long for Cummins (CMI) to get back into the good graces of its uptrend.

Regular DailyWealth readers know we monitor shares of Cummins for an "instant read" on the global economy. Cummins is the world's largest independent maker of high-horsepower diesel engines… the kind that power bulldozers, cranes, heavy trucks, mining shovels, and electrical generators.

This makes its share price rise and fall with the pace of economic and infrastructure activity. For example, we noted the stock's big breakdown in January 2008, which came well before the economic crisis.

Back in June, we noted how Cummins had broken its long post-2008 crisis uptrend to reach a six-month low. We said its weakness was enough to raise our "antennae." But as you can see from our updated chart, this "high horsepower" indicator has snapped back into its uptrend.

This week, Cummins impressed Wall Street analysts with incredible quarterly revenue growth of 45%. This huge growth has pushed Cummins back into its long-term uptrend… and close to its all-time high around $120 per share.

When we see this sales growth and share-price strength, we have to say, "Sure, there are things out there worth worrying about… But if Cummins is still booming, things can't be all that bad!"

www.dailywealth.com

[kennynah]

is this the same ingredient we use to cook curries? cummins ?

[winston]

Not vested

Engine manufacturer Cummins Inc <CMI.N>, fell 5.1 percent to $93.81 after cutting its outlook.

Source: Reuters

[winston]

Earnings Coming in Softer for Cummins

Sterne Agee lowered estimates on the maker of power-generation equipment.

As we expected, Cummins took down its North American growth forecast for third and fourth quarters.

Source: Barron's

[winston]

ONE OF THE BIGGEST RED FLAGS IN TODAY'S MARKET

Today's chart highlights the ugly breakdown of our high-horsepower economic indicator...

Regular DailyWealth readers are familiar with the companies we use to gauge the state of the economy.

And right now, one of them suggests we use caution: Shares of Cummins (CMI), the world's largest independent maker of diesel engines, just broke down.

Cummins designs and manufactures engines and power-generation equipment that help power bulldozers, cranes, oil pumps, mining shovels, and generators. Its poor performance tells us that driving, building, and digging have started to slow down.

Cummins shares are down nearly 30% over the past four months, recently sinking to a new three-year low.

We aren't saying it's time to go running for the hills... but when shares of Cummins are in a downtrend, it's important to be cautious.

Source: Daily Wealth

[winston]

not vested

Cummins (CMI) makes engines for bulldozers and other heavy gear; industrial generators; and filtration and compression systems.

That makes it a cyclical business, and management would be hard-pressed to name one of its markets—from agriculture to mining and trucking—that isn’t weak right now. For all of 2016, the company forecasts a 10% sales drop.

But the 97-year-old firm is an old hand at navigating downturns, and it’s still generating gobs of free cash flow. It’s also keeping a tight lid on costs and a healthy balance sheet.

That’s let Cummins power up its dividend (which yields a tidy 3.3% today) by an amazing 1,038% in the past decade! And it’s not done yet, with dividends accounting for an easily manageable 53% of earnings and 46% of free cash flow.

A jump in US infrastructure spending could be just the tonic CMI needs. Throw in the fact that each previous revenue downturn has been a great time to buy the stock, and you get a blueprint for major upside:

Source: Daily Trade Alert

[winston]

HIGH DEMAND FOR ENGINES BODES WELL FOR THE ECONOMY

Today, we see more evidence of an improving economy in the strength of an engine manufacturer...

Longtime readers know we keep an eye on the U.S. economy by looking at healthy consumer spending in industries like hotels, swimming pools, and cruise lines. We've even highlighted how construction equipment can show economic strength.

Today, we'll focus on another company that tells us when Americans are driving, building, and digging...

Cummins (CMI) designs and manufactures engines and generators. It's one of the major players in the space, operating in more than 190 countries with annual revenues of around $18 billion.

In the second quarter, the company reported a 12% increase in revenue from last year, and pointed to higher demand in several markets – including oil and gas, construction, mining, and trucking. That's a good sign for the economy...

As you can see in the chart below, Cummins shares have been marching higher. The stock has rallied around 60% over the past two years, and it recently hit an all-time high. Look for more gains as the economy keeps chugging along...

Source: Daily Wealth