Author: OptimizedValue

This weekend I took a look at Cummins Inc.’s stock, which trades under the ticker $CMI. Cummins Inc. closed for trading on 6/12 at $167.08/share.

They offer an attractive 12.3 P/E (ttm), with a 3.49 P/B.

Cummins Inc. has a 3.14% Dividend Yield, with a low 38.2% Payout Ratio. Their Market Cap is $26.65B, with $2.03B Total Cash (mrq) & $3.84B Total Debt (mrq), for a Debt/Equity (ttm) of 40.73.

CMI has a 80.58% Institutional Ownership percentage, which is one of their many advantages over their Industrial Sector Peers

Cummins Inc. $CMI Stock Fundamentals Vs. The Industrials Sector

CMI’s P/E (ttm) is 64% less than the average Industrials Sector stock, and their P/B is only 3.6% higher than average.

With their 21.7% higher than average Dividend Yield, they look very attractive from an investment standpoint.

CMI’s Market Cap is 367% higher than the Industrials Sector average, with 270% more Total Cash & a 52% better Debt/Equity (ttm) ratio.

They also have 38% more Institutional Investors than average.

Cummins Inc. $CMI Stock Fundamentals Vs. The Machinery Industry

Cummins Inc.’s stock also has many clear advantages over their peers in the Machinery Industry. CMI’s P/E (ttm) is 77% better than average, and 3.6% better than the average Machinery Industry stock.

CMI’s Dividend Yield is ~36% better than average, with a safe Payout Ratio, which is essential for collecting interest.

CMI is 438% larger than average based on their Market Cap, with 365% more Total Cash & 51% better Debt/Equity, which is especially important in this investing & trading environment.

CMI also has 18% higher Institutional Investment.

Cummins Inc. CMI’s Stock Technicals

CMI is trading at $167.08, with a 174.64 10 Day Moving-Average.

Their 50 Day M/A is 157.68 & their 200 Day M/A is 162.98, showing strength vs. other stocks in turbulent times.

Cummins Inc. $CMI Vs. The S&P 500 & NASDAQ Indexes Since IPO

Cummins Inc. has grown by 3,078.41% since it IPO’d on 2/21/73. It has grown 4,225.06% since then with consideration to historic dividends.

In that time, the S&P 500 Index has only grown by 2,551.77%, excluding dividends.

The NASDAQ Index has grown by 7,558.52% over the same time period, excluding dividends.

Cummins Inc. $CMI Has A Great Debt Rating

Moody’s rates CMI’s debt A2. which is Upper-Medium Investment Grade debt. As more & more companies begin to get into trouble, having access to credit will become a luxury, and these guys are in good standing.

Tying It All Together

Cummins Inc.’s stock shows many advantages both from a long-term investment & short term trade perspective. They are in solid business shape, offer a strong yield & can weather the current market storms.

I am beginning to look for entries, although I am debating between whether I buy puts & the buy long when I cash in, or by buying longer-term calls in the meantime.

That will be dictate by external market factors that I see this week, but overall it offers many advantages for both long & short term performance.

*** I do not own any shares of CMI stock when this was written ***

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This weekend I reviewed an old favorite stock, Magna International, which trades under the ticker MGA. As of the 6/12 close, MGA traded at $44.16 per share. From an investor’s standpoint, their 14.9 P/E (ttm) & 1.28 P/B look appealing, especially when combined with their 3.62% Dividend Yield.

MGA Stock Fundamentals Show Great Value

In addition to these great numbers, Magna International has a healthy Payout Ratio of 46.4%, with a Market Cap of $13.18B & $1.26B in Total Cash (mrq). MGA has $4.92B in Total Debt (mrq), with a Debt/Equity ratio of 47.15, and a 56.66% Institutional Ownership.

When compared to its peers in the Consumer Discretionary sector, MGA’s appeal becomes even more apparent.

Magna International $MGA Stock Fundamentals Vs. The Consumer Discretionary Sector

Magna International’s P/E(ttm) is 72% lower than their sector peer, and their P/B is 79.55% lower than average.

While their Beta is 14% higher than average, the rest of their fundamentals look fantastic. They have a 31.6% advantage over their average peer’s dividend, and have a safe Payout Ratio at 46.4%, which is 1.76% better than average.

MGA’s Market Cap is 38.6% larger than their average Consumer Discretionary peer’s stock, with 10.56% more Total Cash (mrq) & 86% better Debt/Equity (ttm).

They have 5% less Institutional Ownership than the average peer.

Magna International Also Outperforms The Auto Components Industry Averages

MGA’s P/E (ttm) is 29% lower than the Auto Components Industry Average, with a 45% better P/B than their average peer. Their 58.8% better yield makes them a more attractive buy, which looks to be safe based on their Payout Ratio.

MGA’s Market Cap is 521% larger than their average peer in their industry, with 192% more Total Cash.

Magna International $MGA’s Stock Technicals Overview

MGA has a current price of $44.16, with a 10 Day Moving Average of 45.48. MGA’s 50 Day M/A is 39.63, and their 200 Day M/A is 47.47.

With an RSI of 56, they look prime to perform well, especially during these turbulent times in the market.

Magna International $MGA Stock Vs. The S&P 500 & NASDAQ Indexes

Since they began being traded on 10/4/1984, MGA stock has increased by 1,208.44%.

When you factor in their historic dividend yields, that figure comes out closer to 2,050.5% in gains.

During that same time period, the S&P 500 has only posted 1,769.5% gains, excluding dividends.

The NASDAQ in that time has grown by 3,767.32%, excluding dividends.

Magna International $MGA Has A Solid Debt Rating

MGA is rated A3 at Moody’s which is Upper-Medium Grade Investment Level Debt. This is becoming more and more important, as many businesses are under increasing distress due to 2020’s market turbulence.

Tying It All Together

I have owned Magna previously, and loved it for its fundamentals. I am beginning to revisit them due to their strength of business, safe dividend yield, and growth potential.

I plan to begin rebuilding a long position in MGA over the coming weeks, but my entry point will be dependent upon external market conditions as the week progresses.

For Full Report:

*** I do not currently own MGA, although I am beginning to look at their stock for an eventual entry ***

This week I bought some options, mostly targeting Inverse S&P 500 & Inverse NASDAQ Index ETNs. This enables me to have a pessimistic view of markets in the near-to-mid term, without taking the risk of playing the Volatility ETN game with long positions.

$9 & $10 SPXS Call Options With A 10/16/2020 Expiration

I purchased some $9 & $10 call options that expire by the 16th of October this year. This enables me to sell SPXS for $9 & $10 based on each contract before that date, regardless of the price.

The best profits will be if it climbs above those levels, as the options are then “in-the-money”, and can be exercised at a discount to the current share price.

Given it’s recent performance & the current state of markets, I can see both price points going into the money within that time period. If they do, selling the options then will be great.

If not, I can sell them prior to that date, still profiting, while giving the rest of the risk from the current price to the $9 & $10 Strike Prices until the expiration date.

$10 SQQQ Call Options With a 6/5/2020 Expiration

Looking to add a little more short term risk, I also bought some $10 SQQQ call options that expire on 6/5/2020. The NASDAQ will likely lose steam the fastest of the indexes, given that it has benefitted the most from speculative long-positions since March.

Given the recent global situations between COVID-19 & civil unrest/uprisings, there should be enough issues plaguing the markets to put these options in the money, and at the bare minimum making them able to be flipped for a profit before the expiration at the end of the week.

Based on the existing plays I had going for SQQQ longs, this complements it well, and risks much less money with more to gain.

Seagate Technologies PLC trades under the ticker STX & is a Technology stock that closed for trading on 5/8/2020 at $51.06/share.

Seagate Technologies PLC. STX Stock Fundamentals Broken Down

STX’s P/E (ttm) is 7.6, with a P/B of 7.33. They offer an attractive Dividend Yield of 5.09% annually, with a supportive Payout Ratio of 53.13%.

They sport a $13.14B Market Cap, with $1.614B in Total Cash (mrq), $4.17B in Total Debt (mrq), & a Total Debt/Equity (ttm) of 222.95.

Their 1.22 Beta & 89.17% Institutional Ownership also make them worth taking an additional look for an investor or trader’s portfolio.

Seagate Technologies PLC STX Stock Fundamentals Vs. The Information Technology Sector

Despite a 28% higher price per share than the average information technology sector stock, STX offers many attractive fundamentals that investors & traders should explore.

STX’s P/E(ttm) is almost 90% less than the average IT stock, despite having a 7.8% higher P/B.

STX’s Dividend Yield is 105% more than the average Information Technology Stock, and while their Payout Ratio is higher than average, it is still at a safe enough level for sustainability.

STX has 43% more Total Cash (mrq) than the average Information Technology Stock, although their Debt/Equity (ttm) is very high at 575% more than the average.

Despite this, they offer a 52% higher level of Institutional Ownership than average.

Seagate Technologies PLC STX Stock Fundamentals Vs. Technology Hardware, Storage & Peripherals Industry Averages

Seagate Stock continues to offer great fundamentals when compared with the Technology Hardware, Storage & Peripherals Industry averages.

STX’s P/E (ttm) is ~77% less than average compared with the Technology Hardware, Storage & Peripherals Industry, and their Dividend Yield is 10% higher than average.

While they are much smaller in Market Cap than average, they still have a 67% higher % Institutional Ownership, showing that major investors find more strength among them than their peers.

Seagate Technologies PLC STX Stock Technicals

STX’s 10-Day Moving Average is 48.72, and their 50-Day Moving Average is 47.97, adding support to their $51.06 share price.

However, their 200-Day Moving Average is 53.26, providing some future downwards pressure on the stock’s price.

Their RSI is 56 when looking at a one year chart.

STX Has Outperformed The S&P 500 Since It Began Trading

STX has gained 326.62%, in addition to it’s Dividend Yield which over time brings the total gains for one share of STX from when it first began trading to ~406%.

In that same time, the S&P 500 has only grown 229.38%, excluding dividends.

Seagate Technologies STX Stock Has However Trailed The NASDAQ Index

STX’s 406% All-Time Gains are less than the 569%+ returns of the NASDAQ index (excluding dividends), but when looking at both charts it still looks like a strong portfolio candidate.

Seagate Technologies PLC STX Stock Offers An Investment Grade Debt Rating

Moody’s rates STX a Baa3, viewing their debt as investment grade. With the impending troublesome times, this combined with their attractive dividend yield & low P/E will attract more & more investors’ attention as they flee to safety.

Tying It All Together

STX stock offers a lot of strong fundamentals that are attractive to investors & traders alike. Overall, they offer a unique place for your money, as they are a tech company that has decent fundamentals & yield, more like a value play.

I don’t currently hold any, although I may begin to consider buying some if it were to return to the $47-range, pending a further technical review at that point.

As I contend that there will be another NASDAQ correction coming up, buying shares at around $47 would offer a ~8% discount from the current price, with a 5% cushion for future fall via their dividend yield.

For longer-term focused investors this may not matter as much, but when I consider their Beta & then discount a market drop, this seems like a good buy-in level.

Regardless, it is certainly worth consideration for investors & traders alike upon further research!

*** I do not own shares of Seagate Technologies Plc, STX Stock***

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This week I had a look at Weis Markets, Inc., which trades under the ticker $WMK.

Weis Markets, Inc WMK Stock Fundamentals

At the close of trading on 5/1/2020 it traded for $50.39/share, with a P/E (ttm) of 19.9 & a P/B of 1.28

WMK offers a 2.46% Dividend Yield for it’s investors, with a 44% Payout Ratio, making it able to continue to be competitive with other players who also raise their yields annually, and they provide some defense during market downturns & times of uncertainty.

Their -0.15 Beta means they don’t tend to move with the market, making them especially appealing in troubled times like we are entering.

With an Estimated Market Cap of $1.36B, WMK currently recently reported having Total Cash (mrq) of $149.344M, with Total Debt (mrq) of $218.77M, & a Debt/Equity (ttm) of 19.71.

Their % Institutional Ownership is 38.8%.

Weis Markets, Inc. WMK’s Stock Fundamentals Vs. The Consumer Staples Sector

WMK costs 16% more than the average consumer staples stock, however they do offer attractive value metrics compared to the sector averages.

WMK’s P/E (ttm) is 30.6% less than the sector average, and their P/B is 98% lower.

Their Dividend Yield is 34% less than the sector average, with an equal Payout Ratio. The Average Market Cap of the Consumer Staples sector is 91% larger than WMK, at $15.45B, leading to WMK having 80% less on hand than the average stock in the sector.

WMK’s Total Debt/Equity (ttm) is 57% better than the sector average, which when combined with their favorable value metrics & their ability to accumulate Total Cash better than competitors gives them an edge in a turbulent market.

WMK Stock Vs The Food & Staples Retailing Industry Averages

WMK also has similar advantages over the other stocks in it’s industry. It is a smaller player with a 93% smaller market cap than average, that has a more faily valued shareprice, and responsible debt compared to its peers.

WMK’s P/E (ttm) is almost 42% better than the Food & Staples Retailing Industry Average, and their P/B is 50% better.

Pair that with their 120% cooler Beta, and their 84.7% lower Total Debt/Equity (ttm) than average, and you’ll notice that this small company offers a lot of standout strengths vs. it’s peers.

Breaking Down Weis Markets, Inc.’s Technicals

Over the last year, WMK has traded relatively flat, until the COVID-19 virus impact stunned markets. This strength should continue while we remain in these uncertain times.

WMK’s current price of $50.39 is above its 10-Day M/A: 48.75, it’s 50-Day M/A: 41.44 & its 200-Day M/A: 39.31, with an RSI of 71.

This strength should continue to climb as investors seek yield from companies with lower levels of debt.

Weis Markets, Inc WMK’s Stock Growth Story

Weis Markets, Inc was under $5 when it first began trading in the 1980’s, and is now 10x that amount. They have also offered a stable dividend that has increased just about annually since 1985.

While the broader indexes are filled with faster growing names, this is still nothing to be ignored. Buying one share of their stock when it opened at ~$4.80 would’ve resulted in over $36 in dividend yield collection alone 35 years later.

It is difficult to compare WMK against the S&P 500 or the NASDAQ given the nature of their negative Beta, but one thing is for certain, consistent income via the dividend & growth.

Tying It All Together

All-in-all, WMK is worth further investigation. As a means of collecting yield from a safer stock, as well as having a negative Beta, it makes it more advantageous in a time where markets are in turmoil. There is always a need for groceries & food, and those businesses continue to operate throughout this pandemic.

Factor in the fact that it is a much smaller player than most of it’s competitors, and it appears even more defensive for times like these.

Right now the price is a little high as it just hit a new high last week, but if it looks to continue climbing it may be more appealing if it re-checks out the ~$48 range depending on how the charts look at that point.

As always, please do your own research & due diligence before making any decisions.

*** I Do Not Own Any Shares Of Weis Markets, Inc, WMK***

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