"Looking for a little muscle in your stock, look no further than Cummins Inc. symbol CMI"

Dow Jones Industrial Average  12,681 (UP) Week ending 07-22-2011

 Back at the end of 2008, beginning of 2009, I had purchased at
the same time Cummins Inc.(CMI) and GE (GE) both at distressed bargain prices between $10 and $15. I doubled my money on both and then I sold one of them. I kept GE which is now trading at $19.04. I sold the Cummins and it is now trading at $106.78.  A "Six" bagger from my purchase price. What I should have done is sell half of my position in each, and held the balance. *** Lesson learned for you to pass on to your kids.


......And now I am going to tell you to buy Cummins Inc. (Symbol CMI) at it's present day price of $106.78. Talk about muscle. 2011 earnings per share are projected at $8.13 and for 2012 of $9.82 per share. Long term earnings growth of 19% and a Return on Equity of 28% make this a desirable long term investment.

"Cummins, Inc. designs, manufactures, distributes and services diesel and natural gas engines, electric power generation systems and engine-related component products." 
When thinking about the Indiana based Cummins, think powerful like the Indianapolis Colts Dwight Freeney and Robert Mathis. Unstoppable!

       We are entering a time period where winners are going to go up and the weaker stocks are going to get punished unmercifully. So load up on on the good ones that can deliver superior performance for you.

 Muscle up, and hop on the Cummins "Big tire" wagon and take a ride to 150. 

             Freewilly

"Nobody thinks about being sick in the summertime, so you can get a good buy right now on Amgen, Novartis and Gilead Sciences"

Dow Jones Industrial Average 12,480 (Down) week ending 07-15-2011

7-19-2011 - Back to looking at good fundamentals this week. The markets gyrations both up and down have everyone in a twist about buying stocks that are not of the best quality. It looks like all boats are floating up. Don't fall into this trap. The summertime always seems to give an opportunity for buying some good quality Pharma stocks at a reasonable price.

     Amgen Inc. (Symbol AMGN, $55.27), with a PE of 10.82 and 5 year earnings growth rate of 13.3% over the last 5 years would be one of these quality stocks. Amgen will have 2011 earnings of $5.05 per share and 2012 earnings of  $5.49. The stock is actually even for the last 12 months, so has not added any premium to reflect the improving added earnings.  There is no "hot" money in here right now, so you don't have to worry about a sharp sell off. I would buy the stock here. 

 Novartis (Symbol NVS, $62.17) is the second stock that I would like to mention. It pays a $2.00 dividend so you start out with a $3.29 yield. The One year Total Return on the stock is 28.9%.  2012 earnings are looking like $5.76 per share. A little more aggressive purchase than Amgen , but very solid choice. PE on the stock is 11.08, so is very reasonable.

Gilead Sciences, Inc. (Symbol GILD, $41.70) is the third stock that looks good in the summertime. Again a palatable forward PE of 10.85 , so no overpaying here. 2011 earnings of $3.76 and 2012 earnings of $4.31 looks promising going forward.  Gilead has a fabulous 5 year revenue growth rate of 27%. They have some of the highest net profit margins in the industry at a lofty 34.6 %. No dividend here, but a 12 month total return  of 22.5% with not a lot of volatility. GILD will make a nice building block for your portfolio.



Mokie relaxing in cap.

 So stay relaxed with all this market turmoil and
don't go chasing things like gold or speculating on stocks that have run up wildly.
     
Freewilly 

"Could the sleeping giant, Microsoft (MSFT), finally awaken from it's 10 year slumber?"

Dow Jones Industrial Average  12,721.88  (Way UP!)  Thursday 12:33PM EST, 07-07-2011

I know it has been a flat line stock price for 10 years. I know a hundred guys before me have written this same article, thinking that something eventually had to happen and waited and waited and oh, waited some more. You have a 2.43% dividend yield and a PE of 9 to hold you over in case nothing happens with little downside risk.

 Microsoft, Inc. (Symbol MSFT, $26.74) finally seems to be "in motion" on a two pronged front creating a catalyst for growth. Getting their operating system into the Smartphones of Nokia (Symbol NOK, $6.45) , which if you take off your US rose-colored glasses, has tremendous international distribution is big. Nokia is a perfect match for the Microsoft's simplified Smartphone interface . They have always embraced simplified operations for electronic devices that they have built.  Nokia also has other interesting connections like owning NAVTEQ the maker of many GPS mapping software. This move should help both these companies.

The second catalyst is that Microsoft is in the process of acquiring SKYPE for 8.5 Billion. (One thing Microsoft has is plenty of cash!).
Microsoft plans to leverage Skype by forming a relationship with Facebook and marrying these two social networking interfaces together to surge forward with a new type of voice and data social networking experience.

Add these factors to a company is going to earn $2.58 per share for 2011 and $2.77 per share for 2012 and you are looking at a very good fundamental and value proposition with the stock at this level. I could see the stock going to the $35-$37 dollar range without allot of trouble.


When you look at the other companies in Microsoft's space, like Oracle, Redhat and Salesforce,  they all have had 40 plus % Total Returns for One year. Microsoft is only at 4.4% total return for this year, even though they have the highest ROE Return on Equity, (44.70%),  much better than all those other companies mentioned . If Microsoft can raise the bar a little on that 5 year growth rate of 8.31% a little higher, they produce plenty of profit already, and could finally get this sleeping giant into motion.

This market has made a tremendous move here in the last 10 days of 700 points, so you should probably buy this stock in partial segments to build a position.

Stay cool on this hot day. It is finally time for Microsoft to start moving up, so get on board the train.

 Freewilly