Opinions
Jim Cramer - Mad Money
Cummins
CMI-N
COMMENT
May 22, 2023
$218.030
Stock price when the opinion was issued
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BUY
He's a big believer in hydrogen fuel cells, a source of energy the world needs. CMI is one hydrogen company with real earnings that has invested heavily in hydrogen. They are a leading maker of truck engines. Also, they made a series of acquisitions in the past 5 years to build an impressive portfolio of hydrogen technologies, like the first hydrogen-powered train, airplane and fueling station and this year they build a device to cleanly extract hydrogen from water.
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BUY ON WEAKNESS
They reported a blow-out quarter, sending shares 9% higher. They beat revenues in 4 of their 5 largest divisions, boasted expanded marginsThey are part of the transition to nuclear energy, even though it will likely get less support under Trump, at a pace that will match customer needs. Also, he likes their power systems business (generators, commercial power systems for buildings), timely during the data centre boom. Caveat: While only 9% of their sales come from China, those could be hit by Trump tariffs.
INDUSTRIAL PRODUCTS
A great industrial company that yields almost 3%, but industrials are selling off now because of higher interest rates. Cummins will come back, but it will take time, because a slowdown is hurting the industrials more than any sector.