If you’re looking to put money to work trader Mike Murphy of Rosecliff Capital thinks an industrial name is about to power higher.
“I’m a buyer of Cummins ,” he says.
In the near term Murphy thinks earnings will be a positive catalyst.
“They announce earnings the end of next week, on May 1st," he says. "Into the release we think the stock can make a move. Cummins was sold off when industrials sold off broadly on China fears, but only a small part of their business is China-related. And it's hands down one of the best run industrial names out there – it has a strong balance sheet – and low net debt.”
And in the long-term Murphy thinks as a maker of engines, Cummins benefits from a truck replacement cycle.
“With fuel efficiency standards getting stricter companies will either be forced to retire some of their fleet or make major overhauls.” Either way, Murphy thinks the trend benefits Cummins.
“We think the stock will take out its highs – ultimately we think it’s a $150 stock,” he says.
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Trader disclosure: On Apr 20, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian is long AAPL; Pete Najarian is long BAC CALLS; Pete Najarian is long C; Pete Najarian is long JPM CALLS; Pete Najarian is long MS; Pete Najarian is long INTC; Pete Najarian is long YHOO; Pete Najarian is long SBUX CALLS; Pete Najarian is long COP; Pete Najarian is long PEP; Jon Najarian is long KOG; Jon Najarian is long DDMG; Jon Najarian is long CBOE; Jon Najarian is long CME; Jon Najarian is long CIGX; Jon Najarian is long LQMT; Jon Najarian is short UA PUTS; Josh Brown is long CRR; Josh Brown is long BRK-B; Josh Brown is long JPM; Josh Brown is long ARCO; Josh Brown is long AAPL; Josh Brown is long COP; Steven Weiss is short AAPL puts; Steven Weiss is long BAC; Steven Weiss is long JPM; Steven Weiss is long SNDK; Steven Weiss is long QCOM; Steven Weiss is long TBF; Steven Weiss is long TBT; Steven Weiss is long AIG; Steven Weiss is long HAIN; Steven Weiss is long CSC; Steven Weiss is long HGSI; Steven Weiss is long MDRX; Steven Weiss is long HK; Steven Weiss is short MT; Steven Weiss is short ERIC; Steven Weiss is short JCP; Steven Weiss is short X
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Bernstein and/or its affiliates do and seek to do business with companies covered in its research publications. As a result, investors should be aware that Bernstein and/or its affiliates may have a conflict of interest that could affect the objectivity of this publication. Investors should consider this publication as only a single factor in making their investment decisions: CMG
Bernstein and/or its affiliates do and seek to do business with companies covered in its research publications. As a result, investors should be aware that Bernstein and/or its affiliates may have a conflict of interest that could affect the objectivity of this publication. Investors should consider this publication as only a single factor in making their investment decisions: MCD
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