Is Cummins Inc. (CMI) A Good Stock To Buy?

Seeing as Cummins Inc. (NYSE:CMI) has experienced falling interest from hedge fund managers, we can see that there was a specific group of money managers who were dropping their full holdings in the third quarter. Interestingly, Morris Mark’s Mark Asset Management said goodbye to the biggest stake of the 700 funds monitored by Insider Monkey, comprising close to $5.1 million in stock. Andy Redleaf’s fund, Whitebox Advisors, also said goodbye to its stock, about $4.3 million worth. These moves are important to note, as total hedge fund interest dropped by 3 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Cummins Inc. (NYSE:CMI) but similarly valued. We will take a look at CBS Corporation (NYSE:CBS), Williams Partners L.P. (NYSE:WPZ), Zimmer Biomet Holdings Inc (NYSE:ZBH), and Hartford Financial Services Group Inc (NYSE:HIG). All of these stocks’ market caps are closest to CMI’s market cap.

As you can see these stocks had an average of 44 hedge funds with bullish positions and the average amount invested in these stocks was $1.38 billion, higher than the $417 million in CMI’s case. CBS Corporation (NYSE:CBS) is the most popular stock in this table. On the other hand Williams Partners L.P. (NYSE:WPZ) is the least popular one with only 19 bullish hedge fund positions. Cummins Inc. (NYSE:CMI) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CBS might be a better candidate to consider a long position.