Cummins
An InvestorPlace Real America Index component, Cummins (NYSE:CMI) is the world’s leading (there’s that moniker again) diesel engine manufacturer, which also happens to manufacture power-generation equipment like generators, both small and humungous.
Like the other two companies, Cummins came through its most recent earnings release a little bit wobbly, warning investors that it expects revenue to be approximately $17 billion compared to previous guidance of $18 billion. It also estimated EBIT to be approximately 13.5%, compared to prior guidance of 14.25% to 14.75%.
CMI has basically acknowledged that growth will be slow, and it’s taking steps to reduce costs, including planned work-week reductions, shutdowns at some manufacturing facilities and targeted workforce reductions of up to 1,500 employees by year-end.
The stock is trading well below its 52-week high of nearly $130 per share. With the warnings weighing on the stock, now is a great time to get in at an entry price of just over $90 a share. Keep in mind that a 50-cent dividend gets you a 2.16% dividend yield. Not too shabby for a 9x trailing earnings opportunity.
One caveat: It might pay to wait just a little bit more because Cummins announces earnings on Oct. 30, and a bigger window might open soon thereafter.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he is long XOM and JNJ.
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