Seeking Alpha: Wärtsilä Down On Power ... For Now

These are challenging times for Wärtsilä (OTCPK:WRTBY) (WRT1V.HE), one of Finland's largest and oldest industrial companies. Orders for drillships, semi-submersibles, and supply ships have cratered alongside oil prices, and the demand for new cargo ships is hardly better. With that, the company's leading position in marine engines, automation, and propulsion doesn't look all that impressive. Likewise in the energy business, as emerging market orders for flexible baseload gensets has plunged on currency and commodity weakness.

It looks too early to be bullish on these shares, but I think this is a good time to get up-to-date with due diligence on companies like Wärtsilä. The company's biggest original equipment markets are weak, but the lucrative service business will help tide it over, and cyclical markets don't stay down forever. When demand for large ocean-going vessels and flexible electrical gensets recovers, Wärtsilä's niche leadership and operating leverage should serve investors well.

U.S. investors should note that Wärtsilä's ADRs are not especially liquid. Many brokers now support international trading, and there is more liquidity to be found buying these shares on the Helsinki Stock Exchange.

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Wärtsilä Down On Power ... For Now

Seeking Alpha: Cummins - A Rockier Road In 2012?

Sometimes a company executes its plan so well that you almost forget that it still operates in a cyclical industry outside of its control. Such seems to be the case with diesel engine and power generator manufacturer Cummins (CMI). Although Cummins management has done a great job of emphasizing free cash flow growth and economic returns, to say nothing of international exposure that many companies dream of, the fact remains that several major markets are looking shaky or at best long in the tooth.

A Tale Of Three Fleets?
For the most part, major North American commercial truck builders like Navistar (NAV), PACCAR (PCAR) and Daimler have been pretty optimistic on the market conditions for new truck builds in 2012. Credit is pretty cheap and even if the trucking industry isn't going gangbusters, it still needs to update fleets.

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Cummins: A Rockier Road In 2012?

Investopedia: Truck-Makers Hauling In Profits

Judging by the comments from one of Europe's largest truck-makers, the recovery in the market for big rigs still has a ways to go. Along with its earnings release on Monday, Germany's MAN SE (Nasdaq:MAGOY.PK) expressed a fair bit of confidence in the growth outlook for the truck market in 2011. While investors who showed up early to play the commercial truck revival have already done well, this latest news gives at least some hope that the rally is not running on empty just yet. 

Strength in Europe, Strength in Emerging Markets

Not only did MAN report a 22% jump in revenue from last year, but the company reversed a year-ago loss in profits of over $1 billion. Looking specifically at the commercial truck segment, revenue jumped 36% on a unit increase of nearly 53%. Encouragingly, orders in the truck business were up 68% and the company talked about strength in both the European market and developing markets like Brazil. (For more, see The Upside Of Trucking.)

If Europe is indeed strong, that is good news not only for MAN, but major players like Volvo (Nasdaq:VOLVY.PK) and Scania as well, to say nothing of larger vehicle companies like Volkswagen (Nasdaq:VLKAY.PK), Daimler and Fiat Industrial that all have business (or investment stakes) in the commercial truck sector. 

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