Cyclicals Are Different
Most stocks tend to do best when earnings are accelerating or they are at least maintaining a decent growth rate. Economically sensitive shares, often called cyclicals, offer their best entry points when current news looks bad or hints at getting worse.
Fears of another recession have pushed diesel engine maker Cummins (CMI) off its March high of $129.51 to $83.53. Is that 35.5% dive enough to make it a buy? Let's examine the past decade's price and earnings action for clues. All the charts shown are split-adjusted for two 2-for-1 splits that in 2007 and 2008, respectively....318 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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