Hedge Funds Are Betting On Cummins Inc. (NYSE:CMI)

Cummins Inc. (NYSE:CMI) has seen an increase in support from the world’s most elite money managers recently.

At the moment, there are many gauges shareholders can use to monitor the equity markets. A duo of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite fund managers can outperform their index-focused peers by a solid amount (see just how much).

Just as integral, bullish insider trading activity is a second way to parse down the marketplace. As the old adage goes: there are a variety of motivations for an executive to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this method if shareholders know where to look (learn more here).

Keeping this in mind, let’s take a peek at the key action regarding Cummins Inc. (NYSE:CMI).

What does the smart money think about Cummins Inc. (NYSE:CMI)?

At year’s end, a total of 39 of the hedge funds we track were bullish in this stock, a change of 30% from the third quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings substantially.

When looking at the hedgies we track, Partner Fund Management, managed by Christopher MedlockáJames, holds the largest position in Cummins Inc. (NYSE:CMI). Partner Fund Management has a $144 million position in the stock, comprising 6.1% of its 13F portfolio. Sitting at the No. 2 spot is Columbus Circle Investors, managed by Donald Chiboucis, which held a $80 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Panayotis æTakisÆ Sparaggis’s Alkeon Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Ken Griffin’s Citadel Investment Group.

As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Partner Fund Management, managed by Christopher MedlockáJames, assembled the largest position in Cummins Inc. (NYSE:CMI). Partner Fund Management had 144 million invested in the company at the end of the quarter. Panayotis æTakisÆ Sparaggis’s Alkeon Capital Management also made a $57 million investment in the stock during the quarter. The following funds were also among the new CMI investors: Anand Parekh’s Alyeska Investment Group, Dmitry Balyasny’s Balyasny Asset Management, and John Murphy’s Alydar Capital.

What have insiders been doing with Cummins Inc. (NYSE:CMI)?

Insider trading activity, especially when it’s bullish, is most useful 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 experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

With the results exhibited by the aforementioned studies, everyday investors should always monitor hedge fund and insider trading sentiment, and Cummins Inc. (NYSE:CMI) is an important part of this process.

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