CMI

Cummins Inc. ($CMI) Director John Stone Signals Long-Term Confidence With $332K Stock Purchase Amid Executive Selling Trend

05/16/2025 21:12

Cummins Inc. ($CMI) board member John Stone has recently purchased $332,000 worth of company stock, drawing significant investor attention. According to SEC filings dated May 16, Stone acquired 1,000 shares at $332.08 per share. This purchase stands out as the only insider buy amid several months of consistent executive selling. The transaction came approximately two weeks after Cummins released its Q1 2025 earnings. On May 5, the company reported adjusted earnings of $5.96 per share, substantially exceeding analyst expectations of $4.90. However, revenue declined by 2.7% year-over-year to $8.17 billion. Notably, Cummins withdrew its 2025 financial guidance the day following the earnings release, citing uncertainties related to U.S. import tariffs. This announcement triggered a significant drop of up to 7.8% in Cummins India shares and impacted the U.S. parent company's stock as well. Despite these challenges, Truist Securities raised its price target on Cummins from $338 to $342, highlighting confidence in the company's fundamentals. Stone's purchase takes on added significance when viewed against the backdrop of consistent insider selling between August and November 2024. SVP Tony Satterthwaite sold approximately $11 million worth of shares in August 2024 alone, while executive Sharon Barner conducted multiple sales over several months. Even Chairman Jennifer Rumsey participated in a small sale on January 27, 2025. Cummins stock experienced a sharp decline from mid-March through early April 2025, falling approximately 14.6% from $312.92 on March 13 to $267.12 on April 8. However, the stock has since recovered, climbing back to around $330 by mid-May. Stone's purchase occurred during this recovery phase, potentially indicating his belief that the shares remain undervalued relative to the company's intrinsic worth. As a global leader in engine manufacturing and related technologies, Cummins delivered mixed segment performance in Q1 2025. The Distribution segment saw a 14.7% year-over-year increase to $2.91 billion, while Accelera, the company's renewable energy solutions arm, grew 10.8% to $103 million. The Power Systems segment also performed strongly with an 18.7% increase to $1.65 billion. However, the Components segment struggled, recording a 19.9% decline to $2.67 billion. The company has been strengthening its clean energy transition efforts. In June, Accelera by Cummins, Daimler Truck, and PACCAR completed a joint venture to form Amplify Cell Technologies, appointing Kel Kearns as CEO. This venture will begin construction of a 21-gigawatt hour factory in Marshall County, Mississippi, with production targeted to commence in 2027. On May 7, Cummins announced an underwriting agreement for $2 billion in notes, consisting of $300 million 4.250% notes due 2028, $700 million 4.700% notes due 2031, and $1 billion 5.300% notes due 2035. This financing is expected to support the company's long-term growth strategy and investment plans. Industry experts anticipate U.S. core machinery markets to bottom out in 2025. Citi Research projects truck, agricultural, and construction equipment markets will reach their lowest point in 2025 before beginning a recovery. In January, Bank of America upgraded Cummins from 'underperform' to 'neutral,' citing a positive outlook on the U.S. truck production cycle. In this context, Stone's stock purchase may signal an insider's confidence in Cummins' long-term growth potential despite short-term uncertainties. While macroeconomic challenges such as import tariffs remain, the company's strong Q1 performance combined with positive long-term industry outlooks suggests Cummins is well-positioned to navigate these challenges.

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