Beijing, China
If you are into industrialization, the above picture is the end result, particularly in Asia. Due to a perfect blend of not giving a fuck and greed, Asian cities are smog heavens, thanks in large part to horrendous emission standards. I know it’s very uncool to kick Chindia in the nuts, while a perfectly good America is around to kick; but I speak the truth. Our enemies from Asia are DESTROYING the planet, one truck at a time.
The answer:
Cummins turbocharger
Ahhh, what a delight! Cummins is your play on rising emission standards, dictated by EU III and EU IV.
Here in the states, emission standards are being buoyed by Government stimulus, forcing truck fleets to upgrade their diesel engines or be eliminated. Starting 1/1/2010, a multitude of cities and states enacted new laws that will prohibit bullshit trucks. For example, the city of Oakland is prohibiting trucks made earlier than 1993 from entering their ports (get the fuck out of here!), unless they upgrade their fucking diesel engines of course.
Who benefits, you might ask?
Cummins Inc. [[CMI]]
Cummins is the premier play on the resurgence of the U.S. trucking fleet, most likely to occur in 2h, 2010. And, more importantly, they derive 25% of their profits from Asia.
Think bullshit Foton light truck
Recently, Cummins inked a deal with Foton for 400,000 engines or 20% of China’s light truck market. And, they have a deal in place with medium-heavy truck maker, Dong Feng, where they own a 20% stake in the joint venture. According to estimates, the company should earn $3.65 in 2011, based on a U.S. truck order recovery and Al Gore pressing his boot heel on foreign nations to upgrade their smog machines, in an effort to kill less people via egregious air pollution.
Tag a 20 multiple on $3.65 and you have a $73 stock price inside of one year, aka 55% higher from here.
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FIG
Great pick … THNX!
Added SUN to my LT Acct … may not see these levels for a long time … (my Danny call for 2010)
SUN’s a Fivepher:
1) Refining and Supply segment manufactures petroleum products, including gasoline; middle distillates, such as jet fuel, heating oil, and diesel fuel; and residual fuel oil. It also produces commodity petrochemicals, including olefins and their derivatives, such as ethylene, ethylene oxide polymers, and refinery-grade propylene; and aromatics and their derivatives comprising benzene, cumene, cyclohexane, toluene, and xylene.
2) Retail Marketing segment engages in the retail sale of gasoline and middle distillates, as well as the operation of convenience stores in 26 states, primarily on the East Coast and in the Midwest region of the United States.
3) Chemicals segment manufactures, distributes, and markets commodity and intermediate petrochemicals, such as phenol, acetone, bisphenol-A, and other phenol derivatives, as well as polypropylene.
4) Logistics segment operates refined product and crude oil pipelines and terminals, and conducts crude oil acquisition and marketing activities primarily in the northeast, midwest, and south central regions. As of December 31, 2008, the company owned and operated approximately 3,800 miles of crude oil pipelines and approximately 2,200 miles of refined product pipelines.
5) Coke segment operates metallurgical coke plants and metallurgical coal mines, and manufactures metallurgical coke for use in the steel industry.
Unlocking the Value in Sunoco
By Vincent Farrell Jr.
11/20/2009
Jacques Rousseau of Soleil/Back Bay Research correctly has been cautious on the refinery stocks as fundamentals are challenging. Nevertheless, he has a “buy” recommendation on Sunoco. He believes there is significant value in the company and that a “sum of the parts” analysis equals $48 a share. He expects management to unlock the value of the company in 2010 through asset sales and spinoffs.
The company is considering whether to sell its chemical division and a decision should be made soon. What Rousseau thinks Sunoco should do, and what I call financial engineering (in the best sense of the words), would be to spin off its coke segment into a master limited partnership, similar to what it did for the logistics business. Refining assets are valued by the market at four to six times enterprise value/earnings before interest, taxes, depreciation and amortization, and MLP-type assets are trading at eight to 12 times EV/EBITDA. The shareholders would be the beneficiary of such a mark-up. Using a discounted cash flow calculation, Rousseau arrives at a price target of $38, with the sum of the parts possibility a bit higher.
Mandy has the sweetest accent; Should become a full-time and get rid of stupid Maria or Cabrera.
I used to date a chick from South Africa (used to call her snow white), that had the best accent. Indeed, during our “intimate” moments, I had her yelled out random shit like “COACK PIT”…”COMPUTAAA”
Ahh…great times…great times…
Guess who makes the ceramic substrate that lines the advanced exhaust systems in these vehicles?
Corning! GLW…
Bingo!
Touche sir!
I was scrolling the comments and going to add the same thing.
GLW is very diversified. (They do not just make TV’s)
Corning Enironmental Technologies:
http://www.corning.com/environmentaltechnologies/index.aspx
Corning® DuraTrap® AT Filters Selected by Ford of Europe for Clean Diesel Passenger Cars
http://www.corning.com/environmentaltechnologies/news_and_events/news_releases/2009/2009100501.aspx
Navistar Selects Corning as Supplier of Diesel Particulate Filters and Substrates for Diesel Engines
http://www.corning.com/environmentaltechnologies/news_and_events/news_releases/2009/2009031001.aspx
Navistar Recognizes Corning as a Diamond Supplier
http://www.corning.com/environmentaltechnologies/news_and_events/news_releases/2009/2009071601.aspx
For all of the “Environmental Technoliges” news releases..proceed here..
http://search.corning.com/search?q=Corning&access=p&entqr=0&ud=1&output=xml_no_dtd&oe=UTF-8&ie=UTF-8&client=cet-en-pr_cms&proxystylesheet=cet-en-pr_cms&site=cet-en-pr_cms&getfields=Title&sort=date:D:R:d1&filter=0&daterange:1999-01-01..2020-01-01
I am back! I have shorted the USO and went long the URE which are the bulk of my positions.
This year is a new year and I plan on doubling my cash with these awesome trades. Lets not talk about last year.
Buyer
Please don’t lambaste me for asking, Sovereign Fly, but does the current premium on this equity concern you slightly?
Trading 13 x 2011 eps is a premium?
Compare the financials of CMI @ $47 with NAV @ $41 (teamed up with CAT) and this is a discount based on forward earnings as well as value.
Nice write up Fly, CMI’s earnings have gotten killed but last quarter’s big surprise and upward revisions show promise.
Tim, long URE, really?
Don’t forget who is a major seller of CMI’s products- Chrysler. There’s rumors that Fiat is going to replace the Cummin’s engine in Dodge’s 2500 Ram with one of their own.
That would effectively kill the only redeeming quality of a Dodge truck. Cummins’ small truck engine ROCKS. American pickup buyers would reject this nefarious decision vociferously. The idea of a Fiat engine implant should hit the floor with the same sound made by a surgically implanted glob commonly used for enhancement of female anatomy. The sound made would be something like………..WOP
Bullshit
Where’s the interpretation regarding the first trading day and it’s implications?
Chrysler will keep cummins
A Fucking Dodge with a Fiat engine. What the Fuck ! that would be some shit. Have to see it to believe it though.
I’ll keep my clunker.
Just thought I’d point it out.
Automotive News (among several others)
September 7, 2009 – 12:01 am ET
Under the leadership of Sergio Marchionne, Chrysler Group is unwinding alliances with other carmakers — a strategy pursued by former owner Cerberus Capital Management.
Instead, Marchionne, CEO of Chrysler and Fiat S.p.A., will rely on Fiat and its suppliers to achieve economies of scale and fill holes in Chrysler’s lineup.
In recent weeks, Chrysler has:
— Severed its alliance with Daimler AG, which supplied Sprinter commercial vans to Dodge. Chrysler says it may bring Fiat-designed commercial vans to North America.
— Called off a plan with Nissan Motor Co. that would have given Nissan a Dodge-engineered replacement for its Titan pickup and Chrysler a Versa-based small car.
— Held discussions about canceling its Global Engine Manufacturing Alliance partnership with Mitsubishi and Hyundai. Chrysler uses the partnership’s four-cylinder engines, made in Dundee, Mich., in the Jeep Compass and Patriot crossovers and the Dodge Caliber and Avenger and Chrysler Sebring cars.
— Discussed bringing Fiat diesel engines to North America to replace a Cummins engine for trucks, according to news reports.
Under Cerberus, Chrysler executives traveled the globe to build alliances to compensate for Chrysler’s lack of scale. The Marchionne strategy is a clear departure.
By keeping new projects within the Chrysler and Fiat families, the changes should streamline decision-making. But the biggest motivation certainly is lower costs with global platforms.
In July, Marchionne said the alliance will use Fiat platforms, also called architectures, to develop products for North America. And it will develop products for Europe from Chrysler platforms.
With the Chrysler alliance, he said, “We will get to the number that I think is important, which has been roughly 1 million vehicles per architecture.”
Chrysler’s engineering staff already plans to create a number of vehicles adapted from Fiat platforms. Four-cylinder Fiat engines will be used for the Chrysler Group vehicles developed on the Fiat platforms.
Late this month, Chrysler management is expected to decide what vehicles and powertrains fit into the company’s five-year plan.
They just recently announced announced that the Fiat Pennestar 3.6L V6 is going to be used in the Grand Cherokee…
I figured I’d pass the word along. Both Ford and Chevrolet have rights to Cummins motors as well (and Ford offers a Cummins as an option in their MD trucks).
Why would the Chinese suddenly start giving a fuck? Environmental regulations are for Western nations only.
Assuming they do start giving a fuck, why would they buy from Cummins when they can steal the design and produce their own knockoffs instead?
China wants to improve emission standards and have agreed to do so.
New New Yorker article shows that US is now licencing some Chinese cleantech, too.
Speaking of flux capacitor I replaced the capacitor on my heat pump compressor this AM. The fan was not running and it ended up 56 degrees inside last night.
They do so quite badly, considering the air quality in Beijing is sometimes so poor that the scale for it does not contain a rating high enough. If you drove an average, new Western car through Beijing, it would actually clean the air. I am not exaggerating. The Commies know that this is a problem that will only get worse.
Further thought……….the only fly in the ointment (no pun intended) is that buyers of light pickups will be prone to bypass the diesel option if the fuel hits levels akin to summer 2007 (>$4.50/gl) Many who own diesel versions of said truck are questioning the veracity of their decisions as we speak. On the other hand of the Ford/ChevyDodge triumvirate , the Dodge does indeed provide the best fuel economy and longest life.
Another way in is via Cummins JV re: natural gas engines (etc.) with Wesport Innovations – symbol is WPRT; I traded this up and down a couple years ago and then T. Boone got involved and they reverse split. Haven’t followed it much since but if oil continues to rise it might be worth a look:
Westport Innovations Inc. the research, development, and marketing of engines and fuel injection systems that use gaseous fuels, including natural gas, liquefied petroleum gas (LPG), hydrogen, and hydrogen-enriched compressed natural gas for the on-road commercial vehicle sector primarily in North America and Asia. The company offers engines utilizing gaseous fuels for transit and shuttle buses, conventional trucks and tractors, and refuse collection trucks, as well as specialty vehicles, such as short haul port drayage trucks, material handling trucks, street sweepers, and vehicles for selected industrial applications; direct injection LNG system for heavy-duty trucks; and engines fuelled with LPG primarily for the OEM forklift market. It also provides alternative fuel engines, and relevant parts and kits for use in automobiles, heavy duty trucks, power generation, and shipping applications; and cryogenic tanks for compressed natural gas or liquefied natural gas.
Yes.
I was going to mention WPT (WPRT on the naz). great canadian play on the low emission motor engine.
Yeah, Canada only when I played it.
I can see the competitive advertising now…. “You can have a US build CUMMINS DIESEL (said in low basso baritone gravelly voice, of course) in your truck… or you can have a Foreign made FIAT engine.” (this last part dripping w. contempt).
LOL. “Fiat” just screams poor quality. Way to go Chlyslah.
_____________
Then again, who bought who? Just sayin’.
Treu… but Chlyslah isn’t exactly a “quality is job #1” name either.
______
I like the new ads, btw. Newton’s Principia to advertise Wood’s new service?
Porthos should be honoured (sic)!
_____
This may have the Chinese calling bullshit on AlGore.
__________
What the fuck? -16C? That’s a balmy May day up here in the Great White North.
They all ready told him FO in Copenhagen
Did I not warn you people that you were going to die this year if you did not send me money? This cold is merely an anomaly – I know warming and it is on the way. The way to play China is Chinese stocks which will get a boost when the currency is valued up and two are ACH and SINA.
Comrade Al, I have erectile dysfunction – play Chinese vice stocks.
Why are the RW Nutcases so concerned about whether global warming exists or not?
Do they want to drive around in their fuckin’ SUV’s, take their ATV’s into the national parks and their water ski boats on the lakes and adopt the attitude “fuck everybody else- I deserve it!” – while consuming 10X their share of non-renewable resources?
Who flew to Copenhagen in private jets and basically lived a farce for nothing? Was it LW nutcases? Who has the attitude that Obama Pelosi Reid Frank Kerry Gore Clinton et al know everything about everything? LW nutcases want to take control today like Lenin and Trotsky wanted to take control a century ago.
Who gives a fuck about Al Gore! Conserve global resources and stop the costly foreign warmongering. It don’t take no Einstein to figger that out.
Well, my Tipper certainly gives a fuck about me. I am trying to save the little children. Do you hate the little children? Send me money and I will save the planet and the little children. People are dying when selfish individuals like you delay in sending me the money.
Time Machines run better with Cummins…..
PPT at 2.98, fyi
Just noticed that myself. I have followed your advice in the past using the hybrid score to raise some cash and it has worked nicely for me. I almost sold some ECA going into the close but held on as it continued to rise. I’ll have my finger on the trigger tomorrow if I see the hybrid clear 3. Your story about getting killed in January is still in the back of my mind.
OEW nightly recap:
“Today’s rally confirmed the SPX wave 4 low on friday at 1115. We updated the hourly chart accordingly. Yes, there was a slight overlap between Wave 1 at SPX 1116 and Wave 4 at SPX 1115. Yet, OEW did not confirm the overlap in the SPX, only the overlap in the DOW. The hourly charts can get just a bit sloppy at times. Once the OEW 1133 pivot is cleared the market should rally near the long term pivot at 1168. If this new year enthusiasm continues, it could happen this week.”
Party on Garth ….
It goes without saying, TFWA!
Then why are you saying it?
OBTW, WTF does TFWA mean?
fid
Stock market is up and my market is down.
Where are all the ho’s? Especially the blondes.
my PPT is bummed out. Please send the women my way..text 1-800-GOLFER
Fly
What about westport $wprt ? They have partnerships with Cummins and there competitors.