CMI Stock Report
2-Year Price History
Recent Price
(7/2 4:17PM)
-4.7%
$34.25
52-Week Price
$17.70 - $74.00
Market Capitalization
$6.9 Billion
Most Recent Dividend
$0.60
Ockham's Rating
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CMI Revenue
As we have often noted, in our valuation methodology, "Cash is King." Well, it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, CMI the high and low end of the Price to Sales per share ratios are 0.66x and 0.28x respectively.
Notice that CMI's current Price to Sales per share ratio is 0.41x, which is below its historical average only slightly. So, while not a huge positive for our analysis, we do feel it is worth noting that CMI does look a bit undervalued on a Price to Sales basis, all other factors being equal. However, if the Price to Sales ratio drops further, Ockham Research is likely to become more bullish on this stock.
CMI Cash Earnings
As a value investment framework, Ockham Research is similar to a private equity firm in terms of our valuation methods. We are always on the lookout for value in the form of sales and cash numbers. In the case of CMI, Ockham views their current Cash Earnings as significantly above its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for CMI to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 9.44 and a 4.01 low over the same period.
Therefore, at the current price of $34.25 and a Price to Cash Earnings ratio of 7.73, CMI is significantly overvalued. This diminishes the attractiveness of CMI until we see either a significant increase in cash earnings or a decline in price. A decline of the Price to Cash Earnings ratio of 15% is needed just to return to the historical cash earnings multiple.
CMI Dividends
While it is not necessary to pay an attractive dividend or a dividend at all, to receive a positive rating from Ockham, we view dividends as an additionally helpful measure in determining the future potential of any company.
In CMI’s case, the estimated annual dividend is $0.70 resulting in a current dividend yield of 2.04%. Similar to our review of Sales and Cash Earnings per share, we evaluate dividend yields from CMI against the historic high and low levels over the past 10 years. The highest dividend yield from CMI over this period was 6.14% while the lowest dividend yield was 0.60% It is never a good sign for a company to pay significantly lower dividends, in this case 39.47% below the median yield. Although, dividends are a relatively small portion of our analysis framework, we still see this as a negative factor.
The latest TV Media Discussion
“…Haven't stopped yet. From ben bernanke's testimony on capitol hill, complete with denials and one "i don't recall." that hasn't spooked the representative CUMMINS of maryland and aaron shock of illinois on whether they believe him when he says he and the fed did not force the lynch merger. …” …more details…
“…On that theme, foe,lks, check out the auto parts makers.8 magna, tefneco, trw, all rising here today. Then CUMMINS diesel, now it's buy rated at ga, they think it's headed to $45 a share. …” …more details…
“…The way, that dan fitzpatrick liked at one point. I remember reading about them in realmoney.Com. And I like schlumberger, and i'm not backing away because they are the two best of breed. The chartists say CUMMINS is I say if you like CUMMINS you >> buy buy buy! >> -- caterpillar. Cramer! >> announcer: coming up, get instant access to the prodigy of …” …more details…
“…A global economic rebound in order to get in ahead of all the big institutional buyers. If you think the worldwide economy will snap back in the not-too-distant future. If you think the dollar's going hey, then you're going to want to be in CUMMINS. My problem here is if we really believe those things then as good as CUMMINS would be, as good as it could be, I would much rather be in caterpillar, which I own for my charitable trust, actionalertsplus.Com because the expectations are just as low for cat but it's an accidentally high yielder. Tice the size of CUMMINS' yield. Even as some people worry cat's dividend isn't protected I think it has a much better rebound potential. Because it has more exposure to infrastructure proposal as round and the one I think is coming in india. CUMMINS okay? And while it should do better with the weaker dollars and its earnings could explode upward with a global economic recovery in 2010 I say if you like CUMMINS off the chart you should love cat off the fundamentals. And may the best man, or the best chart win. Let's go to mark in new jersey. >> caller: hey, jim. How about for auld lang syne an …” …more details…
“…It's got a huge business internationally, 59%. The rest of the world is coming back and we're printing money like crazy. That should be a recipe for the dollar going down. The dollar's already down 7% from its peak in march. Every time it declines CUMMINS international sales become more valuable because of currency translation. However, if the dollar strengthens, like many pundits I think wrongly hope will, then I believe that CUMMINS will have a hard time breaking through that resistance because business, quite simply, at CUMMINS is and this company, i've got to tell you, it needs overseas sales to make a comeback. It will not be able to do it we know how bad things are from the first quarter, where even though CUMMINS delivered earnings that were better than the streetion expectations, engine segment down 32%. Power generation down 17%. Components down 35%. Distribution down 7%. CUMMINS said it expects sales to decline by 30% in 2009. You want to buy that stock? I mean, they also said the global economy won't bottom until late this year at the given all that weakness, how can how can the chart signal buy when business stinks? Perhaps because this is precisely when the big boys like to buy an out of favor stock like CUMMINS. The company and the analysts who cover it are assuming the worst. So when news comes out, well, expectations are so low, it might go up. CUMMINS does look expensive, trading at 16 times forward but the possibility of an eventual recovery is not in the and if we do get a recovery, I think it will have a much, much lower multiple but you have to …” …more details…
“…Was on light volume. Technicians use that as a polygraph. Light volume means profit taking not that there's something wrong like concerted selling. That's another reason why fitzpatrick believes that with the bulls now holding their ground CUMMINS will break out of this current range that it's been stuck in like that. Fitzpatrick likes CUMMINS based on the chart. We're fundamentalists. Meaning we believe in looking at the underlying company. We don't care about the chart. …” …more details…
“…One I used to use at my hedge fund, as the new resistance. This longer-term line is whenever it gets to it fails. That's the place where the big money decides to sell. The reason he likes CUMMINS is that he thinks that CUMMINS stock could do the same thing with the 200-day moving average that it did with the 50-day one. In other words, secrecy it broke through the resistance. He's saying it should break through the resistance of the 200 day and then shoot higher. …” …more details…
“…In his realmoney.Com column he's got all this stuff he's been he's a go-to guy when it comes to technical analysis. You've probably seen him on he does great stuff there. He thinks CUMMINS has a sweet chart that indicates its stock is going higher. Go to monitor. Oh, that's -- that's a stage cue. At the end of march CUMMINS broke out. It broke out above its 50-day -- now, he likes the 50-day average and the 200-day. It broke up above its 50-day …” …more details…
“…Moves lately. More and more of the big boys are using the charts to make I call on a number of chartists. I watch the charts. And this week I want to take a look at the chart of CUMMINS, cmi. A classic industrial company that makes engines, power generation equipment, filtration and exhaust systems, as well as the components that go into all …” …more details…
“…Appreciate what you do for the everyday guy and we appreciate you having our backs. >> tell more people about the tats growing phenomena. >> caller: it's a great show, >> thank you. >> caller: CUMMINS. Cmi. >> CUMMINS has got this truck it's too linked to the part of the economy that has not rebounded yet. We know it's a great company. We featured it a long time ago when we went to indiana. It's too early in what's known as the turn in the psych toll recommend CUMMINS. I can't do it as much as i'd boy, i've got to tell you it's a great company but I don't see any earnings momentum. I still see them pulling back. And they've got chrysler let's go to judy in florida. …” …more details…
“…You know that some of the nation's top banks have been reeling, but our next guest says this is a time of opportunity tore some of the smaller flayers out there. Kevin CUMMINS is the president and ceo of a new jersey based bank with $7 billion in assets. Thank you for coming in. >> thanks for having me. >> we've been talking about …” …more details…
“…The wolverine state! >> hey, wolverines, we love michigan state, too, you know, nothing the matter with them. We don't want them to lose. >> I wondered what you thought of cmi. >> it may get a comeback. That's a late cyclical play and one of the last things that it's up two bucks today. Yes, at this point in the economy you can probably buy that with three points down and …” …more details…
“…Boo-yah from springdale, sashing is arazorback country, man! >> you're still making things and doing things that aren't hopefully being demonized about cmi companyins. We bought, unfortunately several months ago when it was a little less than $75 that was the high. >> oh, ouch! Remember, though, remember, sharon, we don't care where it's …” …more details…
“…Companies like mcdermott, caterpillar, joy global, all up about 10% today. Jacobs, CUMMINS, floour, did I mention fleur? Foster wheeler -- I think i've got them, that's pretty of the but it's amazing how hungry the market is for this story to be true. Hasn't even happened yet. …” …more details…
“…It's getting a lot worse. Fertilizer is down 45%. Autos down 61%. No surprise there. Parts of the resource base we thought we were doing better, watch china cmi on wednesday. Again, it came out last night. For some uptick, and have you two months in a row improved pmi in china chshgs we all know. …” …more details…