I'm going to attempt something a little odd today, Fools. Even though I recently bought shares �of engine-maker�Cummins (NYSE: CMI ) I'm going to be giving you three reasons to consider selling Cummins stock today.
Why am I doing this?
Recently, Nobel Prize winner Daniel Kahneman visited Fool headquarters in Virginia. While visiting, he talked about how a number of different biases can lead us to believe that we can predict the future with relative certainty. In reality, he argued, we are just deluding ourselves.
It got me to thinking about how I don't write enough about the�risks�of owning the stocks I own. So, though I don't plan on selling my Cummins stock right now, I think it's healthy for me to practice and model this behavior.
1. Big slowdown in emerging markets
Many investors in Cummins are hoping for the company to grow its presence in Brazil, China, and India. As those countries build out their infrastructures, there will be continued demand for trucks and machinery. If a Cummins engine can find its way into those trucks or pieces of heavy machinery, it would have a significant effect on the company's revenue.
MSC Industrial Direct Co., Inc. (MSC), incorporated on October 25, 1995, is direct marketers and distributors of a range of metalworking and maintenance, repair and operations (MRO) products to customers throughout the United States. The Company operates primarily in the United States, with customers in all 50 states, through a network of five customer fulfillment centers (four customer fulfillment centers are located within the United States and one is located in the United Kingdom and 106 branch offices (104 branches are located within the United States, one is located in the United Kingdom and the other is located in Mexico). The Company offers approximately 600,000 stock-keeping units (SKUs) through its master catalogs, weekly, monthly and quarterly specialty and promotional catalogs, brochures and the Internet, including its Websites, mscdirect.com, mscmetalworking.com and use-enco.com (MSC Websites). In April 2013, the Company announced that it has completed the acquisition of the North American distribution business (BDNA or the Business) of Barnes Group Inc.
The Company's customers include a range of purchasers of industrial supply products, from individual machine shops to Fortune 1000 companies, to government agencies, such as the General Services Administration (GSA) and the Department of Defense. The Company uses its database of companies and contacts, and the Company also purchases information on prospective customers in the form of databases, mailing lists, and email lists to target the distribution of these various publications and other marketing vehicles to specific individuals within an organization whose purchasing history or other criteria suggest receptiveness to specific publication titles and promotions. The Company also provides electronic ordering capabilities (EDI and XML) to support its customers' purchase order processing.
The Company's products represent a range of MRO products that include cutting tools; measuring instruments; tooling component! s; metalworking products; fasteners; flat stock; raw materials; abrasives; machinery hand and power tools; safety and janitorial supplies; plumbing supplies; materials handling products; power transmission components; and electrical supplies. The Company provides product information and ordering capabilities on the Internet. The Company also maintains a hardware and software platform in support of its VMI program, which allows customers to integrate scanner-accumulated orders directly into its Sales Order Entry system.
Advisors' Opinion: - [By Ben Levisohn]
MSC Industrial Direct (MSM) has dropped 5.8% to $87.98 after the company met earnings forecasts but missed on revenue and offered disappointing fourth-quarter guidance.
- [By Rich Duprey]
Citing the benefits of providing high-margin, low-cost consumables with a broad distribution footprint throughout the U.S. and Canada, industrial supplier MSC Industrial Direct (NYSE: MSM ) announced today that it has completed the�acquisition of Barnes Group's (NYSE: B ) �North American distribution business�for $550 million.
Top 5 Machinery Stocks For 2014: Lindsay Corp (LNN)
Lindsay Corporation incorporated on January 7, 1974, is a provider of range of water management and road infrastructure products and services. The Company operates in two segments: Irrigation and Infrastructure. The Company�� irrigation segment includes the manufacture and marketing of center pivot, lateral move, and hose reel irrigation systems, which are used principally in the agricultural industry. The irrigation segment also manufactures and markets repair and replacement parts for its irrigation systems and controls, and designs, manufactures and services water pumping stations and controls for the agriculture, golf, landscape and municipal markets. The Company�� infrastructure segment includes the manufacture and marketing of moveable barriers, specialty barriers, crash cushions and end terminals, road marking and road safety equipment, large diameter steel tubing, railroad signals and structures, and outsourced manufacturing services. The Company�� principal infrastructure manufacturing facilities are located in Rio Vista, California, Milan, Italy, and Omaha, Nebraska. In August 2013, the Company announced that it has completed the acquisition of Claude Laval Corp.
Irrigation Segment
The Company manufactures and markets its center pivot and lateral move irrigation systems in the United States and internationally under its Zimmatic brand. The Company also manufactures and markets separate lines of center pivot and lateral move irrigation equipment for use on smaller fields under its Greenfield and hose reel travelers under the Perrot and Greenfield brands in Europe and South Africa. The Company also produces or markets irrigation controls, chemical injection systems and remote monitoring and control systems, which it sells under its GrowSmart brand. In addition to whole systems, the Company manufactures and markets repair and replacement parts for its irrigation systems and controls. The Company also designs, manufactures and services water pumping stations and! controls for the agriculture, golf, landscape and municipal markets.
The Company�� irrigation systems are primarily of the standard sized center pivot type, with a small portion of its products consisting of the lateral move type. Both are automatic, continuous move systems consisting of sprinklers mounted on a water carrying pipeline, which is supported approximately 11 feet off the ground by a truss system suspended between moving towers. The Company also manufactures and distributes mini-pivots and hose reel travelers. The Company also markets pivot monitoring and control systems, which include remote telemetry and a Web or personal computer-hosted data acquisition and monitoring application. These systems allow growers to monitor their pivot system, accumulate data on the operation of the system, and control the pivot from a remote location by logging onto an Internet Website. The pivot monitoring and control systems are marketed under the GrowSmart brand and product name FieldNET.
In the United States, the Company sells its irrigation systems, including Zimmatic, to over 200 independent dealer locations, who resell to their customer, the farmer. Dealers assess their customer�� requirements, assemble and erect the system in the field, and provide additional system components, primarily relating to water supply (wells, pumps, pipes) and electrical supply (on-site generation or hook-up to power lines). Lindsay dealers generally are local agribusinesses, many of which also deal in related products, such as well drilling and water pump equipment, farm implements, grain handling and storage systems, and farm structures. The Company has production and sales operations in France, Brazil and China, as well as distribution and sales operations in South Africa, Australia and New Zealand and sales operations in Central America and the Middle East serving the European, South American, Chinese, African, Australian, New Zealand, Central American and Middle Eastern markets, respect! ively.
Infrastructure Segment
The Company�� Quickchange Moveable Barrier (QMB) system consists of three parts: T-shaped concrete barriers that are connected to form a continuous wall; a Barrier Transfer Machine (BTM), capable of moving the barrier laterally across the pavement, and the variable length barriers necessary for accommodating curves. The BTM employs an inverted S-shaped conveyor mechanism that lifts the barrier, moving it laterally before setting it back on the roadway surface. The QMB system is useful in busy commuter corridors and at choke points, such as bridges and tunnels. QMB systems can also be deployed at roadway or roadside construction. The Company offers a range of equipment lease options for QMB systems and BTM equipment used in construction applications.
The Company offers a line of redirective and non-redirective crash cushions, which are at locations, such as toll booths, freeway off-ramps, medians and roadside barrier ends, bridge supports, utility poles and other fixed roadway hazards. The Company�� primary crash cushion products cover a range of lengths, widths, speed capacities and application accessories and include brand names, such as TAU, Universal TAU-II, TAU-B_NR, ABSORB 350 and Walt. In addition to these products the Company also offers guardrail end terminal products such as the X-Tension and TESI systems. The Company also offers specialty barrier products, such as the SAB, ArmorGuard, PaveGuard and DR46 portable barrier and/or barrier gate systems. The gates are generally used to create openings in barrier walls of various types for both construction and incident management purposes. The DR46 is an energy absorbing barrier to shield motorcyclists from impacting guardrail posts.
The Company offers preformed tape and a line of road safety accessory products. The preformed tape is used primarily in temporary applications, such as markings for work zones, street crossings, and road center lines or boundaries. The road s! afety equ! ipment consists of plastic and rubber products used for delineation, slowing traffic, and signaling. The Company also manages a testing laboratory, Safe Technologies, Inc., that performs testing of safety products. The Company�� Diversified Manufacturing and Tubing business unit (Diversified Manufacturing) manufactures and markets large diameter steel tubing and railroad signals and structures, and provides outsourced manufacturing and production services for other companies. The Company�� customer base includes certain industrial companies and railroads. The Company�� primary infrastructure market includes moveable concrete barriers, delineation systems, guardrails and similar protective equipment. The United States roadway infrastructure market includes projects, such as new roadway construction, bridges, tunnels, maintenance and resurfacing, and the purchase of rights-of-way for roadway expansion and development of technologies for relief of roadway congestion.
Advisors' Opinion: - [By Jacob Roche]
In 2008, only about 14% of cropland in the U.S. was irrigated, and less than half of that was done with high-efficiency center pivot systems, like the kind Valmont and its competitor Lindsay (NYSE: LNN ) sell, so farmers have been scrambling to upgrade their equipment to deal with increasingly bad weather. This presents a big opportunity for Valmont, which gets about 28% of sales from irrigation equipment. The opportunity is even bigger for Lindsay, which gets about two-thirds of its sales from irrigation equipment.
- [By Benjamin Shepherd]
Steve Halpern: Now, one investment idea in the sector that you like is the area of water management. Could you tell us about Lindsay Corp. (LNN)?
Top 5 Machinery Stocks For 2014: Sun Hydraulics Corp (SNHY)
Sun Hydraulics Corporation (Sun) designs, manufactures, and sells screw-in cartridge valves and manifolds used in hydraulic systems. The Company has facilities in the United States, the United Kingdom, Germany, Korea, France, and China. Sun Hydraulik Holdings Limited (Sun Holdings), a wholly owned subsidiary of Sun was formed to provide a holding company for the European market operations; its wholly owned subsidiaries are Sun Hydraulics Limited (Sun Ltd.) and Sun Hydraulik GmbH (Sun GmbH). Sun Ltd. operates a manufacturing and distribution facility located in Coventry, England, and Sun GmbH operates a manufacturing and distribution facility located in Erkelenz, Germany. Sun Hydraulics Korea Corporation (Sun Korea), a wholly owned subsidiary of Sun, operates a manufacturing and distribution facility. Sun Hydraulics, SARL (Sun France), a wholly owned subsidiary of Sun was dissolved in November 2011. Sun Hydraulics (India) a liaison office in Bangalore, India is used to develop new business opportunities in the Indian market. WhiteOak Controls, Inc. (WhiteOak), a 40% equity method investment, located in Mediapolis, Iowa, designs and produces complementary electronic control products. On September 27, 2011, Sun acquired High Country Tek, Inc. (HCT), which designs and manufactures a range of standard and customizable electronic control modules used to interpret electronic signals.
Screw-in Hydraulic Cartridge Valves
The Company�� screw-in hydraulic cartridge valves are offered in five size ranges and include both electrically actuated and non-electrically actuated products. The floating construction introduced by the Company results in a self alignment characteristic.
Standard Manifolds
A manifold is a solid block of metal, usually aluminum or ductile iron, which is machined to create threaded cavities and channels into which screw-in cartridge valves can be installed and through which the hydraulic fluid flows. The Company�� range of standard mani! folds enables the customers to integrate its screw-in cartridge valves into their machinery and equipment.
Integrated Packages
An integrated package consists of multiple cartridges assembled into a custom designed manifold for a specific customer to provide the specific operating characteristics of a customer�� circuit. The Company�� screw-in cartridge valves translate to integrated packages designed by the Company and result in products that are smaller in size. Due to the self-alignment characteristic, the Company�� integrated packages do not require testing once assembled.
Electronic Controllers
HCT designs and manufactures electronic controllers, which manage the function of electrically actuated valves. HCT�� products range from one valve, manually adjusted controllers to fully integrated hydraulic control systems managing multiple hydraulic valves, as well as other input and output products, such as joysticks and displays.
Advisors' Opinion: - [By Sally Jones]
Sun Hydraulics Corp. (SNHY): Reduced
Up 25% over 12 months, Sun Hydraulics Corp. has a market cap of $787.4 million; its shares were traded at around $30.00 with a P/E ratio of 21.20.
Top 5 Machinery Stocks For 2014: Sterling Consolidated Corp (STCC)
Sterling Consolidated Corp., incorporated on January 31, 2011, is a holding company. The Company�� operations are conducted through its four subsidiaries: Sterling Seal & Supply, Inc. (Sterling Seal), ADDR Properties, LLC (ADDR), Q5 Ventures, LLC (Q5), and Integrity Cargo Freight Corporation (Integrity). The Company through its subsidiary, Sterling Seal engages primarily in the distribution and sale of O-rings, rubber seals, oil seals, custom molded rubber parts, custom Teflon parts, Teflon rods, O-ring cord, bonded seals, O-ring kits, and stuffing box sealant. The Company also owns real property through its subsidiaries ADDR and Q5. In addition, the Company�� subsidiary Integrity Cargo Freight Corporation (Integrity) is a freight forwarding business. In September 2013, the Company announced the acquisition of Superior Seals and Service in High Point, NC.
Sterling Seal sells directly to smaller distributors and original equipment manufacturers in need of seals. It offers a catalogue of standard sizes, and will take orders for special sizes not available in the standard catalogue. O-rings and the other products that Sterling Seal sells are used in a variety of industries, including automotive, pump, transmissions, oil and energy, machinery, and packaging. Integrity are primarily responsible for transporting products the Company order from its suppliers back to its warehouse in Neptune, NJ. After Sterling Seal confirms from its supplier that a product is ready to be picked up, Integrity Cargo is responsible for picking up the products and getting them to the dock and delivered to the Sterling Seal warehouse. ADDR owns a 28,000 square foot facility in Neptune, NJ. Q5 Ventures, LLC owns a 5,000 square foot facility in Apopka, Florida, which is used by Sterling Seal for its Florida operations.
Advisors' Opinion: - [By Peter Graham]
Small cap stocks Muscle Warfare International (OTCMKTS: MWAR), Portlogic Systems Inc (OTCMKTS: PGSY) and Sterling Consolidated Corp (OTCBB: STCC) were all the subject of a few paid promotions as recently as last week but they sure did not start the new week out right because all were sinking on Monday. So are these small cap stocks that are either the subject of promotions or investor awareness campaigns hot or not? Here is a quick reality check:
- [By Peter Graham]
Small cap stocks Pulse Network Inc (OTCBB: TPNI), Sterling Consolidated Corp (OTCBB: STCC) and diaDexus, Inc (OTCMKTS: DDXS) have or could start to sizzle for investors. However, I should also mention that two of these stocks have been the subject of paid promotions while a third apparently has not been, and could be the real deal. With that in mind, here is a closer look along with a quick reality check about all three small caps to help you decide whether they are hot or not:
Bruce Smith/APWorkers assemble a Boeing 787 Dreamliner at Boeing's plant in North Charleston, S.C. WASHINGTON -- Orders for long-lasting U.S. manufactured goods posted their biggest gain on record in July on strong international demand for aircraft, but the underlying trend remained consistent with a steady pace of economic growth. Durable goods orders, items ranging from toasters to aircraft that are meant to last three years or more, jumped 22.6 percent last month after an upwardly revised 2.7 percent increase in June, the Commerce Department said on Tuesday. Transportation orders rose a record 74.2 percent as bookings for civilian aircraft more than tripled. Boeing (BA) had said earlier it received a record 324 aircraft orders in July. Many of the orders, including 150 planes by the Dubai-based airline Emirates, were for expensive models, some still under development. It will take at least 10 years for the resulting increase in production to filter through to U.S. gross domestic product. Outside of transportation, demand was decidedly softer. Still, upward revisions to the data for June as well as rising shipments and orders backlogs showed the factory sector remained on firm ground. "This report reinforces the message that manufacturing growth is picking up and is likely to support stronger GDP growth in the second half of the year," said John Ryding, chief economist at RDQ Economics in New York. U.S. stocks traded higher, with the S&P 500 index near an all-time high. Boeing was little changed. Prices for U.S. Treasury debt were up, while the dollar was flat against a basket of currencies. Separately, the Conference Board said consumer confidence hit its highest level in nearly seven years in August. A gauge of households' perceptions of the labor market touched its best level since July 2008. That also boosted views that the economy remains on a solid growth path, even though another report showed a deceleration in house price growth in June. The S&P/Case Shiller's broader house price index rose 6.2 percent in the 12 months to June, the smallest gain since November 2012, compared to a 7 percent rise in May. Strong Orders for Automobiles While the outsized order increase from Boeing dominated the surge in durable goods orders last month, orders for autos increased 10.2 percent after declining 1.3 percent in June. Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, slipped 0.5 percent in July. The decline, however, followed an upwardly revised 5.4 percent advance in June. Core capital goods orders were previously reported to have increased 3.3 percent in June. Core capital goods shipments increased 1.5 percent last month. Shipments of core capital goods are used to calculate equipment spending in the government's GDP measurement. "That suggests that capital spending ended the second quarter on solid footing, with that positive momentum carrying over to start the third quarter," said Omair Sharif, senior economist at RBS in Stamford, Connecticut. Other details of the report also favor manufacturing in the months ahead. Unfilled orders for core capital goods increased 1.1 percent last month after rising 1.7 percent in June, showing a steady pipeline of work that will keep the nation's factories busy for a while. Durable goods inventories rose 0.5 percent in July, matching the gain in the prior month, suggesting inventory accumulation could add to third-quarter growth after helping to boost output in the second quarter.
The "Lizard Squad" has targeted Sony's online gaming network. NEW YORK (CNNMoney) A group of hackers calling themselves "Lizard Squad" has taken down several popular online video game networks and possibly diverted an American Airlines jet carrying a Sony executive. 
Meet the cat that can steal your Wi-Fi