Truck engine and power generation system manufacturer extraordinaire Cummins Inc. (CMI), which I first discussed here on April 3, 2009, at a price of $29.70, is making a strong case for 2011 "play of the year" -- and it's only April.

Cummins, which is up about 260%, sliced through major, psychological resistance at $100, tested $110, pulled back during the winter and has recently moved back toward $110. Hence, if you haven't already, now would be a good time to consider taking some profits off the table with CMI if you're in near $30.

Quoting the late, great Ethel Merman, everything's coming up roses for truck engine/power generation system manufacturer Cummins Inc. (CMI), first discussed here on April 3, 2009, at a price of $29.70.

Cummins sliced through major psychological resistance at $100 and is testing $110, so if you haven't already, now would be a good time to consider taking some profits off the table with CMI.

If you are looking to profit from a stock that is benefitting from the driving forces in the economy, you should take a look at Cummins Inc. (CMI).

Cummins is powering up to new 52-week highs, and Goldman Sachs recently placed the company on its Conviction Buy List -- raising its price target to $104, signaling a 22% increase from the stock's current level of $85.

Goldman cites stricter global engine regulations and the need to upgrade existing machinery as one of the key factors that should boost Cummins growth.

Cummins was also recently named to the Dow Jones Sustainability World Index for the sixth consecutive year.

I'm reiterating my Buy rating for Cummins Inc. (NYSE: CMI), first recommended on April 3, 2009 at a price of $29.70.

A global manufacturer and servicer of diesel and natural gas engines, electric power generations systems and engine-related parts, Cummins is the not-so-little-engine that could.

Without question, it remains a market for the bold. There are some 'green shoots' sprouting in the economy, to cite phrase popularized by Fed Chairman Ben Bernanke, but there still are formidable problems.

That said, no one ever made a dime by establishing stock positions when things are 99% safe: by that time, almost every stock has been bid-up. You have to prudently bottom fish, and with that in mind, Cummins Inc. (NYSE: CMI) is worth a review.

Cummins Inc. (NYSE: CMI) shares are trading higher today after CNBC's Jim Cramer said Friday night on his television show the company has a clear technological advantage over the competition because its engines are designed to be more efficient than future emissions standards dictate. This could be good news for CMI in the long run. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CMI.

After hitting a one-year high of $71.725 in October, the stock hit a one-year low of $38.11 in January. CMI opened this morning at $58.78. So far today the stock has hit a low of $57.50 and a high of $59.46. As of 1:15, CMI is trading at $58.58, up $2.52 (4.5%). The chart for CMI looks bullish and steady, while S&P gives the stock a bullish 4 Stars (out of 5) Buy rating.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $35 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just five months as long as CMI is above $35 at September expiration. Cummins would have to fall by more than 40% before we would start to lose money.

CMI hasn't been below $38 at all in the past year and has shown support around $47 recently. This trade could be risky if the company's earnings (due out Wednesday before the market opens) disappoint, but even if that happens, that position could be protected by support the stock might find just between $40 and $50, where it has bottomed over the past few months.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in CMI.

Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.

Neil Macneale, editor of 2 for 1 (a newsletter focused exclusively on stocks that have announced stock splits), chose two stocks in the Top Picks for 2007 report, and both picks qualified him for our Top 20 Advisors. His previous selections were Chaparrel Steel Co. (NASDAQ: CHAP) and Steel Dynamics Inc. (NASDAQ: STLD).

As of June 1, 2007, Steel Dynamics has risen 49%. while Chapparel had scored a gain of 67%. Here is Neil's original recommendation for these issues.

Updating his outlook on these steel stock, he now says, "This rate of return cannot continue forever, but there is every reason to believe these remain good stocks to own.

"Steel should continue to perform, given the strength of the economy, even without a strong housing market. As the housing market improves, steel should get even stronger. In both cases, fundamentals for these companies remain strong and the stocks still sell at a discount to their peers."

MOST NOTEWORTHY: The truck industry, Roo Group (RGRP), Accuray (ARAY) and TomoTherapy (TTPY) were today's noteworthy initiations:

• In the trucking industry, FTN Midwest initiated shares of Cummins Inc (NYSE: CMI) and Navistar International Corp (NASDAQ: NAVZ) with Hold Ratings and Oshkosh Truck Corp (NYSE: OSK) and PACCAR Inc (NASDAQ: PCAR) with Buy ratings.
• ROO Group (NASDAQ: RGRP) was initiated with a Buy rating and a $3.75 target at Think Equity, which believes RGRP is positioned to capitalize as the Internet continues to grow as a broadcast medium for video.
• Soleil initiated shares of Accuray Inc. (NASDAQ: ARAY) with a Buy rating and $30 target. The company is Soleil's top pick in radiation oncology.
• Soleil also initiated shares of TomoTherapy Inc. (NASDAQ: TTPY) with a Buy rating and $25 target, as the firm believes all-in-one imaging and radiation oncology system in HiArt could become the new standard of care.

OTHER INITIATIONS:

• Elan Corp (NYSE: ELN) was initiated with an Outperform rating and $40 target at Leerink Swann, which added shares to the firm's Focus List as it is positive on the Tysabri opportunity.
• Cree Inc (NASDAQ: CREE) was initiated with a Buy rating and $50 target at Amtech, as the firm believes the time for LED adoption has finally arrived and will accelerate in the future.
• Nollenberger initiated shares of ZipRealty (NASDAQ: ZIPR) and Move, Inc (NASDAQ: MOVE) with Neutral ratings.
• CIBC World Markets initiated shares of Whole Foods Market Inc. (NASDAQ: WFMI) with a Sector Underperformer rating and $38 target, expecting the company to be impacted by increasing competition.
• BMO Capital Markets initiated shares of Intel Corp. (NASDAQ: INTC) with an Outperform rating and $10 target.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

While you've been busy scouring over this week's earnings reports, back here at rumor central there's been a number of "head ups," but not all that much to write home about, or to send you phoning your broker. But take note of these just for the heck of it.

UNITED RENTALS INC (NYSE: URI)

It's not news that the world's largest rental company has been for sale for a couple of weeks, but once again, as it is for so many speculative situations as this, there's an ongoing undercurrent of chatter. The CEO is retiring in June, and the COO will then hold down the fort. UBS (NYSE: UBS) and Credit Suisse (NYSE: CS) are offering advice. The company's in pretty good shape, and should attract some interesting offers. The stock keeps ticking slowly upward. But the rental market has slowed some. Stay tuned.

EASTMAN KODAK COMPANY (NYSE: EK)

The stock's been moving on up. Take over? Cash infusion? Fabulous new product release? Not one of us outsiders knows for sure what's up. So, what is up? Well, they sold the health imaging business and should get paid its $2.35B soon. Is Hewlett-Packard (NYSE: HPQ) a potential merger partner? Maybe, maybe not. Last month it was reported that Kodak had eyes for OmniVision Technologies (NASDAQ: OVTI). Maybe after quarterly results are released May 4 there'll be a clearer Kodak moment. Just don't count on them to try and rejoin the Better Business Bureau anytime soon. Now there's a rumor.

CUMMINS INC (NYSE: CMI)

Shares hit a record high the other day, at least one brokerage firm upgraded the stock, and reports were that the engine maker was...you guessed it...the target of takeover "expectations." Is that like, expecting? Like expecting to be courted and bought? Fiat (NYSE: FIA) could be expecting cause they are among the "rumored" to want to expand their truck division in good old North America. Cummins, one of the few remaining independents worldwide, meanwhile has been humming along, with three straight years of record earnings. What a machine, eh? Hmmm.