Chair and CEO At Cummins Exercises Options Worth $1.63M

A large exercise of company stock options by JENNIFER RUMSEY, Chair and CEO at Cummins (NYSE:CMI) was disclosed in a new SEC filing on November 14, as part of an insider exercise.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Friday revealed that RUMSEY, Chair and CEO at Cummins in the Industrials sector, exercised stock options for 4,570 shares of CMI stock. The exercise price of the options was $109.09 per share.

Cummins shares are currently trading down by 0.42%, with a current price of $465.53 as of Friday morning. This brings the total value of RUMSEY's 4,570 shares to $1,628,930.

Get to Know Cummins Better

Cummins is a leading manufacturer of diesel and other engines used in heavy- and medium-duty commercial trucks, off-highway equipment, and locomotives, in addition to prime power and standby generators. The company also sells powertrain components, which include filtration products, transmissions, turbochargers, aftertreatment systems, and fuel systems. Sales are approximately 60% US and Canada and 40% rest of the world. Much of Cummins' foreign sales (China, India, and so forth) are through joint ventures. The company operates 650 distributors and over 19,000 dealer locations across 190 countries. Cummins' business model is unique as it competes with many of its heavy-duty truck manufacturer customers, which also make their own engines.

A Deep Dive into Cummins's Financials

Revenue Challenges: Cummins's revenue growth over 3 months faced difficulties. As of 30 September, 2025, the company experienced a decline of approximately -1.64%. This indicates a decrease in top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Industrials sector.

Exploring Profitability:

• Gross Margin: Achieving a high gross margin of 25.6%, the company performs well in terms of cost management and profitability within its sector.

• Earnings per Share (EPS): The company excels with an EPS that surpasses the industry average. With a current EPS of 3.88, Cummins showcases strong earnings per share.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.68.

Valuation Metrics:

• Price to Earnings (P/E) Ratio: Cummins's P/E ratio of 24.23 is below the industry average, suggesting the stock may be undervalued.

• Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 1.93 suggests overvaluation in the eyes of investors, considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio of 13.21, the company's market valuation exceeds industry averages.

Market Capitalization Analysis: With a profound presence, the company's market capitalization is above industry averages. This reflects substantial size and strong market recognition.

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Unmasking the Significance of Insider Transactions

Emphasizing the importance of a comprehensive approach, considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

Within the legal framework, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as per Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are mandated to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.

The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.

However, insider sells may not always signal a bearish view and can be influenced by various factors.

Exploring Key Transaction Codes

Examining transactions, investors often concentrate on those unfolding in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Cummins's Insider Trades.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.