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Cummins Inc (CMI) Earnings February 1st

Jan 03 2011

Cummins Inc (CMI) head-quartered in Columbus Indiana is a manufacturer and servicer provider for diesel and natural gas powered engines. The stock of the company is currently valuing the corporation at $21.86 billion. And the company pays 1.05 a share in dividends to stock holders, yielding near 0.90%.

Cummins’ stock has been reaching new 52 week highs on a regular basis and nearly reached a new one today as the market rallied to start the new year. The company reports its most recent quarterly profit on February 1st and could continue to move higher as the date approaches. They missed their prior quarter by roughly 6% but had three great quarters leading up to September 2010.

Earnings and Revenue

The quarterly expectations have risen over the past 90 days from $1.60 a share to $1.71 a share most recently. Their next quarter and yearly estimates have also climbed over the same period. With revenue growth of 20.40% this year and earnings growth of 102.40%, Cummins is a growth story to look into for your portfolio.

The P/E ratio for the stock is currently 23.31 and it has a PEG ratio of 1.32 which is represents a stock a little ahead of itself, yet the expected growth for next year is 37.3% which supports the added appreciation in the stock.

Seeking Alpha recently listed Cummins alongside Salesforce.com and AutoNation as members of the S&P 500 that beat the index last year.

Stock Options

Options near the money have been active today with Puts of a 105 strike price having the most volume. These options expire on January 21 while the February options should better support for the stock moving higher to $115 a share.

The Chart Trend for CMI shows a recently trading range near the 52 week high between $108 and $112 a share. A rally above the 52 week high will break the trading range to the upside and change the current hold signal to a buy signal at Clearstation.com.

The Trade

I feel that you can build a position looking for some appreciation before the earnings release at the beginning of next month.

Cummins CMI

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