We recently published a list of Jim Cramer Says Buy These 5 Industrial Stocks Before Rate Cuts — And 5 Other Stocks He’s Talking About. Since Cummins Inc (NYSE:CMI) ranks 7th on the list, it deserves a deeper look.

Jim Cramer said in a latest program on CNBC that the NASDAQ has become an “annoying source of funds” for other indexes as mutual funds pull out of tech and growth stocks that would not benefit from rate cuts and funnel these funds into the companies that can “super-charge” their earnings amid the expected rate cuts in September.

Cramer said that the decline of tech stocks could be “painful” for many because while these companies do not benefit from rate cuts, their earnings are still strong. Cramer said there are two kinds of companies that will benefit from rate cuts: the ones with cyclical businesses that thrive during rate cuts and those with high dividend yields.

Cramer said that by the time the Fed would announce its first rate cuts, it would have been “too late” to buy the stocks that benefit from rate cuts.

“You have to let them recharge, let them come down and then you can pull the trigger,” Cramer said.

In a separate program a few days ago Jim Cramer specifically talked about five industrial stocks he’s bullish on before rate cuts. In this article we mentioned these five stocks along with a few other stocks Cramer is talking about during his programs these days. With each company we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

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

Cummins Inc (NYSE:CMI)

Number of Hedge Fund Investors: 38

Jim Cramer said that while Cummins Inc (NYSE:CMI) is known for making truck engines, the stock is a buy because of its energy transition solutions. Cramer said he likes low-carbon solutions made by the company. He also said Cummins is working on zero-carbon solutions for electric and hydrogen engines.

“I think they’ve been smart about working on green engines without abandoning the traditional mainstays that run on gas or diesel. More importantly, Cummins Inc (NYSE:CMI) has a thriving power systems business where they make generators and commercial power systems, including, yes, data centers.”