Diversified Management Inc. Makes New Investment in Cummins Inc. $CMI

Key Points

• Diversified Management Inc. initiated a Cummins position by purchasing 11,713 shares valued at approximately $6.05 million, representing 1.1% of its portfolio. Institutional investors collectively own 83.46% of Cummins.
• Cummins reported quarterly revenue of $9.46 billion, up 9.4% year over year and above estimates, but earnings per share of $6.73 fell short of the $7.21 consensus forecast.
• The company increased its quarterly dividend to $2.20 per share, or $8.80 annualized, producing a 1.7% yield. Analysts maintain a “Moderate Buy” consensus rating with an average price target of $717.59.

Diversified Management Inc. bought a new position in shares of Cummins Inc. (NYSE:CMI - Free Report) during the third quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm bought 11,713 shares of the company's stock, valued at approximately $6,051,000. Cummins comprises 1.1% of Diversified Management Inc.'s holdings, making the stock its 21st largest holding.

Several other hedge funds and other institutional investors have also bought and sold shares of CMI. BlackRock Inc. bought a new position in Cummins in the second quarter valued at approximately $8,204,241,000. Bank of America Corp DE bought a new stake in Cummins during the 2nd quarter worth $1,408,353,000. Bank of New York Mellon Corp acquired a new stake in Cummins during the 2nd quarter worth approximately $973,198,000. Legal & General Group Plc acquired a new stake in Cummins during the second quarter worth approximately $666,635,000. Finally, SG Americas Securities LLC grew its position in shares of Cummins by 257.9% during the 1st quarter. SG Americas Securities LLC now owns 736,670 shares of the company's stock worth $396,343,000 after buying an additional 530,812 shares during the period. Institutional investors own 83.46% of the company's stock.

Insider Buying and Selling at Cummins

In related news, VP Earl Newsome sold 698 shares of the company's stock in a transaction on Monday, August 24th. The stock was sold at an average price of $572.22, for a total value of $399,409.56. Following the transaction, the vice president directly owned 4,479 shares of the company's stock, valued at $2,562,973.38. This represents a 13.48% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. 0.30% of the stock is owned by insiders.

Cummins Price Performance

Shares of NYSE:CMI opened at $520.13 on Friday. The firm's 50 day simple moving average is $569.74 and its two-hundred day simple moving average is $620.98. The company has a debt-to-equity ratio of 0.48, a current ratio of 1.73 and a quick ratio of 1.13. The company has a market capitalization of $71.60 billion, a P/E ratio of 26.58, a P/E/G ratio of 1.36 and a beta of 1.24. Cummins Inc. has a 1-year low of $400.72 and a 1-year high of $737.76.

Cummins (NYSE:CMI - Get Free Report) last released its quarterly earnings data on Tuesday, August 4th. The company reported $6.73 EPS for the quarter, missing the consensus estimate of $7.21 by ($0.48). Cummins had a net margin of 7.82% and a return on equity of 25.29%. The business had revenue of $9.46 billion for the quarter, compared to the consensus estimate of $9.33 billion. During the same quarter last year, the business earned $6.43 EPS. Cummins's revenue for the quarter was up 9.4% compared to the same quarter last year. Research analysts expect that Cummins Inc. will post 30.13 EPS for the current fiscal year.

Cummins Increases Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Thursday, September 3rd. Stockholders of record on Friday, August 21st were given a $2.20 dividend. This represents a $8.80 dividend on an annualized basis and a dividend yield of 1.7%. The ex-dividend date of this dividend was Friday, August 21st. This is a positive change from Cummins's previous quarterly dividend of $2.00. Cummins's payout ratio is 44.97%.

Analysts Set New Price Targets

A number of equities analysts recently issued reports on CMI shares. Evercore cut their target price on Cummins from $845.00 to $782.00 and set an "outperform" rating on the stock in a report on Tuesday, August 11th. Zacks Research downgraded shares of Cummins from a "strong-buy" rating to a "hold" rating in a report on Monday, July 13th. Citigroup boosted their target price on Cummins from $770.00 to $790.00 and gave the stock a "buy" rating in a research report on Tuesday, July 14th. UBS Group cut their price objective on Cummins from $835.00 to $741.00 and set a "buy" rating for the company in a report on Wednesday, September 30th. Finally, Weiss Ratings downgraded Cummins from a "buy (b)" rating to a "buy (b-)" rating in a report on Monday, August 31st. Thirteen research analysts have rated the stock with a Buy rating and five have given a Hold rating to the stock. According to MarketBeat.com, Cummins presently has an average rating of "Moderate Buy" and a consensus price target of $717.59.

Cummins Profile

Cummins Inc NYSE: CMI is a global power technology company headquartered in Columbus, Indiana. Founded in 1919, the company designs, manufactures, sells and services power solutions for commercial, industrial and infrastructure applications.

Its products include diesel and natural-gas engines, electrified powertrains, batteries, fuel cell systems, generators and other power-generation equipment. Cummins also produces components such as filtration systems, fuel systems, turbochargers and emission-control technologies.

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