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Cummins Crushes Caterpillar

Published: Friday, 25 Apr 2008 | 7:08 PM ET

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By: Tom Brennan
Web Editor, Mad Money

An engine-maker like Cummins might not seem like a Green Week play, but the Columbus, Ind., company is ahead of its peers when it comes to emissions standards.

Cummins [CMI Loading... () ] has what Cramer called a clear technological advantage over the competition because CMI is designing engines that are years ahead of future emissions standards. Case in point: The company is already testing 2010-compliant on-highway engines.

In terms of fuel efficiency, Cummins’ engines are 6% better than Caterpillar [CAT Loading... () ]. That’s not the only area where CMI’s coming out on top. It’s taking share from CAT in other heavy-duty engines as well. Cummins is taking share from all its competitors, actually, as it’s now the largest supplier to Paccar [PCAR Loading... () ].

Trading at just 10 times earnings with a 21% long-term growth rate, which is half of CMI’s usual multiple. For that reason, Cramer said he thinks the stock could double.

Here’s the play, though. Cummins reports before the bell on Wednesday, April 30. If Volvo’s latest quarter is any indication – remember, Volvo’s a truck company now, having sold its consumer vehicles division – CMI should do quite well.

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Cummins Crushes Caterpillar