Marvin Boakye, Chief HR Officer at Cummins (CMI), recently bought 1,745 shares. The buy is a new position for the director, who paid $499,133 for the stake.
This is the second insider buy of the year, following a director’s purchase of 562 shares for just under $150,000 back in February. Since then, one director has sold part of their position, and the company’s Chief Administrative Office has made three separate sales.
Overall, Cummins insiders own 0.4% of shares.
The industrial machinery manufacturer is up 36% in the past year, outperforming the overall stock market. Revenues have been flat, but earnings are up over 150%. Cummins has benefited from increased infrastructure spending.
Cummins trades at 15 times forward earnings, still making it inexpensive relative to the average stock. Plus, Cummins has a strong balance sheet, with over $3 billion in cash on hand.
Action to take: Long-term investors may like shares here, or on any drop lower. At current prices, Cummins pays a 2.4% dividend, and has a history of raising its payout over time.
For traders, shares have had a strong uptrend in recent months, but that rate of trade has slowed. A call option like the July $300 calls, last trading for about $4.75, could see mid-double-digit returns in the weeks ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.