Cummins Inc. (NYSE:CMI) was in 34 hedge funds’ portfolio at the end of March. CMI investors should be aware of a decrease in hedge fund sentiment lately. There were 41 hedge funds in our database with CMI holdings at the end of the previous quarter.
At the moment, there are tons of indicators market participants can use to analyze their holdings. Some of the most useful are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top money managers can beat the broader indices by a very impressive margin (see just how much).
Just as key, bullish insider trading sentiment is a second way to break down the marketplace. As the old adage goes: there are many stimuli for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would buy. Various academic studies have demonstrated the useful potential of this tactic if shareholders understand what to do (learn more here).
Now, we’re going to take a look at the key action surrounding Cummins Inc. (NYSE:CMI).
How have hedgies been trading Cummins Inc. (NYSE:CMI)?
In preparation for this quarter, a total of 34 of the hedge funds we track held long positions in this stock, a change of -17% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings considerably.
Of the funds we track, Christopher Medlock James’s Partner Fund Management had the largest position in Cummins Inc. (NYSE:CMI), worth close to $170.9 million, comprising 5.7% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $146.3 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that hold long positions include Donald Chiboucis’s Columbus Circle Investors, Israel Englander’s Millennium Management and Phill Gross and Robert Atchinson’s Adage Capital Management.
Because Cummins Inc. (NYSE:CMI) has witnessed declining sentiment from hedge fund managers, we can see that there were a few hedge funds who sold off their positions entirely last quarter. Interestingly, Panayotis Takis Sparaggis’s Alkeon Capital Management dumped the biggest investment of the 450+ funds we track, worth about $56.7 million in stock.. Joe DiMenna’s fund, ZWEIG DIMENNA PARTNERS, also sold off its stock, about $17.5 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 7 funds last quarter.
What do corporate executives and insiders think about Cummins Inc. (NYSE:CMI)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time period, Cummins Inc. (NYSE:CMI) has seen zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Cummins Inc. (NYSE:CMI). These stocks are Roper Industries, Inc. (NYSE:ROP), Ingersoll-Rand PLC (NYSE:IR), Koninklijke Philips Electronics NV (ADR) (NYSE:PHG), and Illinois Tool Works Inc. (NYSE:ITW). This group of stocks are in the diversified machinery industry and their market caps are closest to CMI’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Roper Industries, Inc. (NYSE:ROP)||19||0||4|
|Ingersoll-Rand PLC (NYSE:IR)||41||1||13|
|Koninklijke Philips Electronics NV (ADR) (NYSE:PHG)||11||0||0|
|Illinois Tool Works Inc. (NYSE:ITW)||25||0||7|
With the results exhibited by our research, retail investors should always monitor hedge fund and insider trading activity, and Cummins Inc. (NYSE:CMI) is no exception.