Stocks ended the week with a downdraft. Seven out of the ten S&P 500 sectors were down. The biggest sector to experience the selloff was energy, although the tech sector eked out a small gain. With crude oil at a six-week low, I'm not sure where the upside will be in the energy stocks. The slumping economy won't help much either. The S&P is down almost 4% for the year and the DJIA is down about 2%.
The stock I'm interested in this week is a big cap: Cummins (CMI). They're traded on the NYSE and designs, manufactures, distributes and services diesel and natural gas engines, electric power generation systems, and engine-related component products worldwide. CMI experienced a mild pullback on Friday, in lower volume, and closed at $79.51. It's been as high as $82 just recently after clearing resistance around $76 in mid-July. Fundamentally, it looks like they are a pretty sound company. Sales growth last quarter was clocked at 32% and their EPS was 317%. It looks like it could pullback a little bit from here. My entry point for this stock would be between $74 and $79. My first target is $82, but I think long term, this stock could run up to over $100.
And check this out: Did you know that the Shake Weight has now hit $40 million in sales? It's being billed as the "As Seen On TV" product of the year. What happened to the Snuggie? Ah, well . . here's a link to the story on CNBC's website: http://www.cnbc.com/id/38788941
Obligatory disclaimer: This blog is for information only. Past results do not guarantee future performance. All financial decisions involve risk and there are no guarantees. The suggestions above are for informational purposes only and the blogger is not liable for any losses incurred as a result of actual investment activity on the part of the reader.
Happy Trading!
Sunday, August 22, 2010
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