Investors Buy Cummins (CMI) on Weakness

Traders purchased shares of Cummins Inc. (NYSE:CMI) on weakness during trading on Thursday. $52.64 million flowed into the stock on the tick-up and $21.13 million flowed out of the stock on the tick-down, for a money net flow of $31.51 million into the stock. Of all stocks tracked, Cummins had the 24th highest net in-flow for the day. Cummins traded down ($0.36) for the day and closed at $148.20

A number of equities analysts have recently issued reports on CMI shares. JPMorgan Chase & Co. downgraded Cummins from a “neutral” rating to an “underweight” rating and dropped their price target for the stock from $156.00 to $137.00 in a research note on Friday, August 24th. Zacks Investment Research upgraded Cummins from a “hold” rating to a “buy” rating and set a $166.00 price target on the stock in a research note on Thursday. Bank of America raised their price target on Cummins from $157.00 to $160.00 and gave the stock a “neutral” rating in a research note on Tuesday, October 9th. UBS Group set a $130.00 price target on Cummins and gave the stock a “sell” rating in a research note on Tuesday, November 6th. Finally, ValuEngine upgraded Cummins from a “strong sell” rating to a “sell” rating in a research note on Friday, September 21st. Two investment analysts have rated the stock with a sell rating, fourteen have issued a hold rating and seven have given a buy rating to the company. The company presently has a consensus rating of “Hold” and an average price target of $162.89.

The stock has a market capitalization of $23.80 billion, a P/E ratio of 14.22, a PEG ratio of 0.81 and a beta of 1.16. The company has a quick ratio of 0.94, a current ratio of 1.54 and a debt-to-equity ratio of 0.19.

Cummins (NYSE:CMI) last released its quarterly earnings results on Tuesday, October 30th. The company reported $4.05 EPS for the quarter, topping the Thomson Reuters’ consensus estimate of $3.76 by $0.29. The company had revenue of $5.94 billion during the quarter, compared to analyst estimates of $5.96 billion. Cummins had a return on equity of 29.17% and a net margin of 5.57%. The firm’s revenue was up 12.5% on a year-over-year basis. During the same quarter last year, the business posted $2.71 earnings per share. On average, analysts expect that Cummins Inc. will post 15.34 earnings per share for the current fiscal year.

The business also recently declared a quarterly dividend, which will be paid on Monday, December 3rd. Investors of record on Thursday, November 15th will be given a $1.14 dividend. The ex-dividend date is Wednesday, November 14th. This represents a $4.56 annualized dividend and a yield of 3.02%. Cummins’s dividend payout ratio is currently 42.94%.

Cummins declared that its board has approved a stock buyback program on Tuesday, October 9th that authorizes the company to repurchase $2.00 billion in shares. This repurchase authorization authorizes the company to buy up to 8.3% of its stock through open market purchases. Stock repurchase programs are usually an indication that the company’s management believes its stock is undervalued.

In related news, Director Franklin R. Changdiaz sold 595 shares of Cummins stock in a transaction dated Thursday, November 15th. The stock was sold at an average price of $147.86, for a total value of $87,976.70. Following the completion of the transaction, the director now owns 6,157 shares in the company, valued at $910,374.02. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, insider Tony Satterthwaite sold 830 shares of Cummins stock in a transaction dated Monday, November 5th. The stock was sold at an average price of $141.61, for a total value of $117,536.30. Following the completion of the transaction, the insider now owns 40,371 shares of the company’s stock, valued at approximately $5,716,937.31. The disclosure for this sale can be found here. In the last quarter, insiders sold 27,090 shares of company stock valued at $4,062,754. 0.62% of the stock is currently owned by company insiders.

Institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Great Lakes Advisors LLC purchased a new position in shares of Cummins during the third quarter valued at approximately $1,383,000. Morgan Stanley boosted its position in shares of Cummins by 5.3% during the third quarter. Morgan Stanley now owns 1,727,365 shares of the company’s stock valued at $252,315,000 after buying an additional 86,791 shares during the period. Legal & General Group Plc boosted its position in shares of Cummins by 7.2% during the third quarter. Legal & General Group Plc now owns 887,408 shares of the company’s stock valued at $129,624,000 after buying an additional 59,419 shares during the period. B. Riley Wealth Management Inc. purchased a new position in shares of Cummins during the third quarter valued at approximately $355,000. Finally, Nordea Investment Management AB boosted its position in shares of Cummins by 2.1% during the third quarter. Nordea Investment Management AB now owns 1,354,117 shares of the company’s stock valued at $197,801,000 after buying an additional 27,494 shares during the period. Institutional investors own 82.51% of the company’s stock.

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About Cummins (NYSE:CMI)

Cummins Inc designs, manufactures, distributes, and services diesel and natural gas engines, and engine-related component products worldwide. It operates through four segments: Engine, Distribution, Components, and Power Systems segments. The Engine segment manufactures and markets a range of diesel and natural gas powered engines under the Cummins and other customer brands for the heavy-and medium-duty truck, bus, recreational vehicle, light-duty automotive, construction, mining, marine, rail, oil and gas, defense, and agricultural markets.

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