No one believed Cummins (CMI) just three months ago. No one believed them when they said they are in secular growth mode because of the need to upgrade engines to meet emission standards. People were skeptical that Cummins was anything but another cyclical ready to be carved up and left for dead by a slowing Chinese economy and vicious European declines.
It didn't matter that the company, a total no-hype outfit, said things would be fine. People weren't skeptical. They simply branded the fine folks from Indiana as hayseeds and rubes. In the height of the crisis a few months ago, the stock traded down to $80, even as the assurances and the order books said, "This is our time."
Now we know they were telling the truth, and the cynics -- again, not skeptics -- just got it plain wrong.
There is such a thing as being too bearish, you know, although that's a cardinal sin to ever admit.
Plus, like with Whirlpool (WHR), Cummins had tended to give up gobs of points after it reported, and, particularly in CMI's case, when it has run.
And boy, did it run.
Now, like Caterpillar (CAT), I bet it bides its time. Maybe it will trade down a bit.
But, with Europe receding and China landing softly, it's hard not to see this one taking out its $120 high.
