REAP Financial Group LLC has increased its holdings in Cummins Inc. (NYSE: CMI) by an impressive 37.7% during the second quarter of 2023. According to a filing with the Securities and Exchange Commission, the firm purchased an additional 49 shares, bringing its total to 179 shares. As of the end of this reporting period, REAP’s investment in Cummins was valued at approximately $59,000.
This move comes amid a trend of increased investment in Cummins by several hedge funds. Notably, Fox Run Management L.L.C. acquired a new stake in the first quarter valued at around $2.75 million. Other notable transactions included Alpha Cubed Investments LLC, which invested approximately $440,000, and Assenagon Asset Management S.A., which raised its position by 8.9%, now owning 13,666 shares valued at $4.28 million. Furthermore, Invesco Ltd. increased its holdings by 11.6% during the same period.
Insider trading activity has also been noteworthy. On October 6, 2023, CFO Mark Andrew Smith sold 8,000 shares at an average price of $439.30, totaling approximately $3.51 million. Following this transaction, Smith’s remaining shares are valued at about $13.87 million, representing a 20.21% decrease in his ownership. Another executive, VP Amy Rochelle Davis, sold 5,002 shares on August 14, 2023, for around $2.02 million, reducing her stake by 19.43%.
Overall, insiders have sold a total of 43,119 shares over the last ninety days, amounting to approximately $17.67 million. Currently, insiders own about 0.41% of the company’s stock.
Financial Performance and Dividend Growth
Cummins recently reported its quarterly earnings on August 5, 2023, revealing earnings per share (EPS) of $6.43, exceeding analysts’ consensus estimates of $5.21 by $1.22. The company achieved a net margin of 8.72% with a return on equity of 26.96%. Cummins generated $8.64 billion in revenue for the quarter, surpassing the expected $8.45 billion. Despite these positive figures, revenue was down 1.7% compared to the same quarter last year.
In a further sign of confidence, Cummins declared a quarterly dividend of $2.00 per share, which was paid on September 4, 2023. This dividend represents an annualized rate of $8.00, reflecting a yield of 1.8%. This increase from the previous dividend of $1.82 is indicative of the company’s solid financial standing, with a dividend payout ratio of 37.61%.
Analysts Share Optimistic Views
Investment analysts have also expressed positive sentiments regarding Cummins’ stock. Barclays recently raised its price target from $381.00 to $387.00, maintaining an “equal weight” rating. Melius Research upgraded their rating from “hold” to “buy,” setting a target price of $500.00. Similarly, Wells Fargo & Company upgraded their rating to “overweight,” and Citigroup increased its target price from $425.00 to $485.00.
Currently, ten investment analysts have rated Cummins with a “Buy” rating, while six have given it a “Hold” rating, and one has issued a “Sell” rating. According to data from MarketBeat, the stock enjoys an average rating of “Moderate Buy” with a consensus target price of $397.43.
Cummins Inc. specializes in designing, manufacturing, and servicing diesel and natural gas engines, alongside electric and hybrid powertrains. The company operates through five segments: Engine, Distribution, Components, Power Systems, and Accelera. Its diverse offerings serve various markets, including heavy-duty trucks, buses, and agricultural sectors.
In summary, REAP Financial Group’s increased stake in Cummins reflects broader institutional confidence in the company’s growth potential, supported by strong financial results and a commitment to returning value to shareholders through dividends.
