First Eagle Investment Management LLC Adds More Cummins to Its Portfolio, But What Does It Mean for the Company’s Future?
May 13, 2023 – First Eagle Investment Management LLC, a global investment management company, has announced that it has raised its position in Cummins Inc. (NYSE:CMI) by an additional 2.8% in the fourth quarter. According to the company’s most recent Form 13F filing with the Securities and Exchange Commission, First Eagle now owns 2,055,849 shares of the renowned engine manufacturer’s stock after purchasing an additional 55,502 shares.
Cummins Inc. is a global leader in designing and manufacturing engines, power generation systems, filtration systems and related technologies. The company operates through four main segments: Engine, Distribution, Components and Power Generation.
This news brings new questions about what this means for Cummins Inc.’s future performance. Some industry analysts predict that this move by First Eagle Investment Management LLC is indicative of their belief that the company is undervalued in comparison to its peers or competitors.
It appears that this addition has had a positive effect on Cummins’ latest earnings report which were released earlier this month. The results saw Cummins post $5.55 earnings per share for Q1; beating analyst predictions by $0.85 per share profit-wise. The business also reported net margins of 8.37%, a healthy improvement over its previous year’s figures.
These positive reports inevitably lead investors to ask: Is it time to invest more significantly in Cummins? At the end of Q1FY23, First Eagle Investment Management LLC owned approximately 1.46% or $498 million worth of Cummins stock and ranked the firm as their 28th-largest position with almost $10 billion total assets under management as of May 13.
However, while these developments may signal positivity towards the company’s future growth potential post-pandemic, it may also generate more controversy over Cummins’ carbon footprint and sustainability practices. Critics have argued that the company doesn’t invest enough towards environmentally-friendly technologies in the context of its business practices.
In conclusion, while First Eagle Investment Management LLC’s additional shares in Cummins Inc. may appear highly positive, with experts predicting better times ahead for the engine manufacturer; there are factors to consider as well- first and foremost being the ability of the company to align itself with green policies that investors are currently looking for in order to reduce potential environmental risks and secure a more sustainable future.
Institutional Investors Show Confidence in Cummins Inc. with Stake Increases, Despite Insider Selling and Analyst Concerns
Cummins Inc. saw hedge funds and other institutional investors recently add to or reduce their stakes in the company. Capital Advisors Ltd. LLC raised its stake by 39.2%, now owning 142 shares worth $25,000 after purchasing an additional 40 shares last quarter. Meanwhile, Stonebridge Capital Advisors LLC lifted its stake by 64% during Q3 2022 and Hollencrest Capital Management acquired a new position in the diesel engine manufacturer during Q4 of that year worth about $33,000. It seems that institutional investors have confidence in the company as Cummins debuted at $217.21 on May 13th, as it has a market capitalization of $30.75 billion.
Despite a market cap of over $30 billion dollars, insiders have reportedly sold almost 17,000 shares in the last fiscal quarter alone with Credit Suisse amongst other financial organisations lowering their price target and maintaining a hold rating on Cummins due, in part, to insider sales (amounting to almost $4.25 million) showing some lack of confidence as well as some analysts’ concerns over the waste from diesel emissions becoming more prevalent.
Regardless for investors hedging on future performance from this beloved blue-chip stock (NYSE:CMI), they’ll be happy to know that a quarterly dividend has been announced and will be paid June 1st at $1.57 per share — representing roughly a yield of almost 3%.
