truthbetold

Cummins and Donaldson: Sharply Falling Growth Stocks

Author is doing nothing but demonstrating his ignorance. Cummins' move during that time was due to two reasons: they released blow out earnings that far exceeded expectations, which they will do again (imho), and Cat, their #1 competitor announced they are exiting the HD truck market in 2010. This has immediate positive market share impact for CMI as Cat customers don't want buy a Cat engine now that won't be supported in 2010 and are turning to CMI. Also CMI has had continual price increases and have so many orders of high horsepower engines and have such a backlog to fill that new orders take over a year before they will ship. As fuel costs, steel, and copper (very big in powergeneration, which is a big part of Cummins sales) prices come down they will be recognizing these higher prices with lower costs. Not to mention the prebuy before 2010 emissions standards go into effect and the rest of 2008 and especially 2009 will look to be record growth years. In 2010 with tighter emissions, Cummins emissions solutions division should be poised for tremendous growth. At $55 a share, I can't imagine opportunity knocking any louder, but the market can be disconnected from reality at times. Question is how long will it remain disconnected?