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Does Cummins (CMI) Expect High Demand?

Soumya Eswaran
·2 min read

Parnassus Investments, an investment management company, released the “Parnassus Value Equity Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. In the first quarter, the Fund (Investor Shares) appreciated 10.17% outperforming the Russell 1000 Value Index’s 8.99%. Stock selection in the Information Technology and Communication Services sectors was the main contributor to the fund’s performance in the first quarter. Overweight in Financials and underweight in Real Estate also contributed. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Parnassus Value Equity Fund highlighted stocks like Cummins Inc. (NYSE:CMI), in the first quarter 2024 investor letter. Cummins Inc. (NYSE:CMI) designs and manufactures diesel and natural gas engines, electric and hybrid powertrains, and related components. The one-month return of Cummins Inc. (NYSE:CMI) was 0.62%, and its shares gained 11.49% of their value over the last 52 weeks. On June 28, 2024, Cummins Inc. (NYSE:CMI) stock closed at $276.93 per share with a market capitalization of $37.878 billion.

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."

A mechanic standing proudly in a factory floor surrounded by the engines the company produces.

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Cummins Inc. (NYSE:CMI) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Cummins Inc. (NYSE:CMI) at the end of the first quarter which was 39 in the previous quarter. The first quarter revenues of Cummins Inc. (NYSE:CMI) were $8.4 billion, representing a 1% decrease from Q1 2023. While we acknowledge the potential of Cummins Inc. (NYSE:CMI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We discussed Cummins Inc. (NYSE:CMI) in another article and shared the list of largest automotive companies and suppliers in the world. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.