6. Cummins Inc. (NYSE:CMI)
Number of Hedge Fund Investors: 38
Jim Cramer compares Cummins Inc. (NYSE:CMI) to Jahmyr Gibbs of the Detroit Lions, noting that while both face some criticism—Cummins for being an engine maker in a freight recession and Gibbs for sharing the workload with David Montgomery—these concerns might be overstated. Cramer points out that Cummins Inc. (NYSE:CMI) is growing through new opportunities, such as selling backup power units for data centers, which was highlighted in their recent earnings call.
“Finally, let’s talk Cummins, the engine maker with major exposure to the data center market. It might be the Detroit Lions running back, Jahmyr Gibbs, of the stock market. The knock on Cummins is that it’s an engine maker during a freight recession, and truck orders are weak right now. The knock on Gibbs is that he has to share the workload with fellow Lions running back, David Montgomery.
I think both concerns are overblown. Cummins is seeing growth with new ventures, like selling backup power units for data centers—we heard them talk about that during their recent earnings call. Meanwhile, Gibbs is thriving because he’s a much better pass catcher than Montgomery.”
Cummins Inc. (NYSE:CMI) is a strong investment option due to its recent solid performance and forward-looking strategies. In Q2 2024, Cummins Inc. (NYSE:CMI) reported an EPS of $5.26, surpassing the expected $4.85, and earned $8.80 billion in revenue, exceeding the forecast of $8.33 billion. This 2.3% increase in revenue from the previous year was driven by high demand for its power generation and truck engines.
Cummins Inc. (NYSE:CMI) is also advancing in green technologies; its zero-emissions unit, Accelera, secured $75 million from the U.S. Department of Energy to boost manufacturing. Additionally, Cummins Inc. (NYSE:CMI)’s new battery joint venture with Daimler and PACCAR highlights its leadership in commercial vehicle electrification. Cummins Inc. (NYSE:CMI) has raised its full-year outlook, reflecting its growing market presence and commitment to alternative fuel technologies.
Parnassus Value Equity Fund stated the following regarding Cummins Inc. (NYSE:CMI) in its first quarter 2024 investor letter:
“Cummins Inc. (NYSE:CMI), a leader in diesel and alternative fuel engines and generators, guided to a shallower-than-expected downcycle in 2024. New rules from the Environmental Protection Agency are expected to drive higher demand for the company’s truck engines in the coming years.”
Now, how about the wide receiver position? For me, wide receivers are akin to turbocharged growth stocks. When they work, they can deliver incredible gains. Nvidia is the obvious stock market analog. A year ago, I compared it to Justin Jefferson of the Vikings, but then he got hurt and missed nearly half the season. Meanwhile, Nvidia was an unstoppable winner, so I’m changing course. Nvidia is now the *Tyreek Hill* of the stock market—the tremendous wide receiver speedster from the Miami Dolphins. Both are known for their blazing speed. Hill had the second-most fantasy points at the wide receiver position last year, and Nvidia speaks for itself.
Yet, both have their doubters—Nvidia has pulled back hard from its highs this summer as people worry about the durability of AI demand, while Hill supposedly has a hand injury. Guess what? I think they’ll both do great, even if there’s some near-term turbulence.”
