CMI

Cummins Inc.

Industrial/Transportation


Presented:04/08/2020
Price:$149.56
Cap:$22.15B
Current Price:$332.68
Cap:$45.59B

Presented

Date04/08/2020
Price$149.56
Market Cap$22.15B
Ent Value$29.63B
P/E Ratio10.37x
Book Value$49.81
Div Yield3.39%
Shares O/S148.12M
Ave Daily Vol1,587,471
Short Int2.49%

Current

Price$332.68
Market Cap$45.59B
Cummins, Inc. designs, manufactures and markets diesel and natural gas engines. It operates through the following segments: Engine, Distribution, Components, Power Systems and New Power. The Engine segment manufactures and markets diesel and natural gas powered engines under the Cummins brand name, for the heavy- and medium-duty truck, bus, recreational vehicle, light-duty automotive, agricultural, construction, mining, marine, oil and gas, rail and governmental equipment markets. The Distribution segment consists of parts, engines, power generation and service, which service and distributes its products and services. The Components segment supplies products such as, aftertreatment systems, turbochargers, transmissions, filtration products, electronics and fuel systems for commercial diesel and natural gas applications. The Power Systems segment engages in power generation, industrial and generator technologies. The New Power segment designs, manufactures, sells and supports electrified power systems with components and subsystems, including battery, fuel cell and hydrogen production technologies. The company was founded by Clessie Lyle Cummins and William Glanton Irwin on February 3, 1919 and is headquartered in Columbus, IN.

Publicly traded companies mentioned herein: Cummins Inc (CMI), Volvo AB (VOLVB SS)

Highlights

The presenter is bearish on the cyclical heavy-duty truck industry and is short shares of Cummins Inc (CMI). He was bearish on the sector prior to COVID-19 and despite CMI share prices falling from near all-time highs of ~$170 to ~$100 due to the pandemic, the stock has mostly recovered and currently trades at ~$150 per share. To him, this is a straightforward 18-month bet on the cyclicality of the business. Before the virus hit, he was anticipating 2020 EPS of $7, a figure significantly lower than the ~$13 consensus estimate. Simply applying a 17x earnings multiple on his $7 estimate yields a target of ~$120 per share, but he also expects downside below the original $7 EPS figure due to the pandemic. 

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