Diamonds and Dogs

12/1/15

Putting the alpha in Alphabet (GOOGL). Google, Alphabet, or whatever you call it is jumping 2.5% to new all-time high thanks to an upgrade at RBC. RBC upgraded the stock with a $880 price target or 12.6% upside from here thanks to improved profitability with Google's core business, greater cost transparency and efficiencies. Google is helping lift the Nasdaq up 0.6%. December is statistically the best month of the year for the stock markes and with all the major indexes up over 0.5% today, we're off to good start.

Cummins's (CMI) engines are sputtering. Cummins, the designer, manufacturer, distributer, of diesel and natural gas engines is having a tough year.  The stock is down 7% today within a point of its 52 week low on a downgrade from Bank of America/ Merrill Lynch. The analyst stated Cummins is facing slowing demand in China along with a strong US dollar that's hurting earnings. Cramer on CNBC chimed in today saying it looks like there is a recession in Cummins's trucking business.  With the recent pullback Cummins looks attractive trading for 11 times reduced estimates and a hefty 4.2% dividend yield.