Trimming Cummins (CMI): Taking Profits in a Top Industrials Performer

Trimming Cummins (CMI): Taking Profits in a Top Industrials Performer

Wed, September 9, 2026 at 4:07 PM GMT+3 3 min read

Harbor Funds, an investment management company, released its Q2 2026 investor letter for "Harbor Mid Cap Value Fund". The letter can be downloaded here. Global equities experienced a sharp rally in Q2 2026, with the S&P 500 returning 15.2%, its strongest quarter since 2020, driven by a shift from software to hardware in the Artificial Intelligence capital spending cycle. Small caps outperformed large caps, with the Russell 2000® gaining 21.5% compared to the Russell 1000's 15.1%. Growth stocks led within large caps, while Information Technology rose about 33%, contributing significantly to the S&P 500's return. The Harbor Mid Cap Value Fund returned 13.99%, outperforming its benchmark, the Russell Midcap Value Index. Strong stock selection in Consumer Discretionary, Real Estate, and Financials contributed positively, although an underweight in Information Technology negatively impacted results. Despite ongoing economic uncertainties, the investment philosophy remains committed to a disciplined value approach. Check the fund's top five holdings for its best picks in 2026.

In its second-quarter 2026 investor letter, Harbor Mid Cap Value Fund highlighted Cummins Inc. (NYSE:CMI). Cummins Inc. (NYSE:CMI) designs and manufactures engines, power generation systems, and related technologies used across commercial vehicles, industrial equipment, and energy applications. On September 08, 2026, Cummins Inc. (NYSE:CMI) closed at $561.55 per share. Over the past month, Cummins Inc. (NYSE:CMI) declined 11.96%, while its shares are up 38.56% over the past year. Cummins Inc. (NYSE:CMI) has a market capitalization of $77.30 billion, and its stock has traded within a 52-week range of $395.86 to $737.76.

Harbor Mid Cap Value Fund stated the following regarding Cummins Inc. (NYSE:CMI) in its Q2 2026 investor letter:

"We trimmed our position in Cummins Inc. (NYSE:CMI) in the Industrials sector. Cummins has done well in recent years and has been a top performer in the Industrials sector. While we continue to hold the stock, the ranking has deteriorated as earnings and cash flow have not kept pace with price increases. However, strong momentum scores have helped keep the stock in the hold range even though valuation scores have deteriorated. Given the stock's run-up, we trimmed our position in the second quarter."

Cummins Inc. (NYSE:CMI) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. According to our database, 60 hedge fund portfolios held Cummins Inc. (NYSE:CMI) at the end of the second quarter, down from 79 in the previous quarter. While we acknowledge the potential of Cummins Inc. (NYSE:CMI) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In a previous article, we noted that surging power demand and strong North American construction spending drove Cummins Inc. (NYSE:CMI) to build record backlogs and raise full-year guidance. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

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This article is originally published at Insider Monkey.