Unlike competitor Caterpillar
The company cited strong sales to construction and mining equipment manufacturers as well as to heavy- and medium-duty truck manufacturers. The company said orders for diesel engines for DaimlerChrysler's
But enough about virile trucks -- the real question at hand is, "Is Cummins a potential investment?"
The first thing that came to my mind is Peter Lynch's thoughts on buying Phelps Dodge
Cummins is a cyclical stock as well. With earnings guidance revised to $5.50 to $5.75 for 2004, Cummins' forward P/E ratio is now about 11. Unfortunately, I believe this means that Peter Lynch would be selling right now instead of buying.
P/E ratios are very good indicators when evaluating cyclical stocks. So don't be fooled by strong demand at Cummins. Although the company is cranking on all cylinders, investors buying today will be racing against investors who have already left the starting line.
Fool contributor David Meier has a manly V-8-powered Ford Bronco, but he does not own any of the stocks mentioned.