The Sell for Cummins (CMI) this week is based on the most recent relative pricing of its shares and market intelligence. The Sell recommendation for Cummins Inc (NYSE:CMI) is the outcome of a process of analysis that is proprietary which generated conclusions that were below average in 4 areas: a ranking in the company's sector that is in the third quarter, ranking in the company's industry group that is in the bottom eighth, analytical scoring that is below average, and a quantitative risk/reward calculation that is average; and produced above average in 2 areas: an economic sector rated above average in attractiveness, and an industry group ranked above average in attractiveness. CMI has recently seen its Portfolio Grader rating downgraded over the last month from a Hold to a Sell.
CMI ranks in the top 10% of its industry group, Trucks/Construction/Farm Machinery, and in the top 10% of its sector group, Producer Manufacturing, with a market value of $26.4 billion.
The Producer Manufacturing sector is ranked number 9 among the 20 sectors in the Portfolio Grader universe putting it in the top half of all the GICS sectors. The Trucks/Construction/Farm Machinery industry group is ranked 19 among the 129 industry groups within the GICS sectors, placing it above-average in terms of the Proprietary Quantitative Score scoring system.
The scores CMI has achieved are average or below-average scores in 4 of the 8 areas evaluated by Portfolio Grader in the ranking of company stocks.
CMI's operational scores provide mixed results with rankings for operating margin and earnings growth that are well below-average, and a score for sales growth that is above average. Scores for visibility of earnings are mixed, with a ranking for earnings revisions and earnings surprises that are better than average, while the score for earnings momentum is much worse than average. CMI's grade for return on equity is discernibly better than its industry group average but its ranking for cash flow is well below-average. Based on these fundamental scores, Cummins places in the bottom quartile of the industry group.
Portfolio Grader uses the Proprietary Quantitative Score to measure CMI's shares from the angle of risk/reward. This unique scoring methodology evaluates the relative value of CMI's shares based on the recent $159.25 share price of the shares relative to its peers, the market and risk associated with its industry and sector groups. Using this risk/reward calculation, the company currently scores below-average in its industry group compared to its peers.
The Proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results, with A being 'strong buy' and F being 'strong sell'. Explore the tool here.
Commentary provided by UpTick Data Technologies.