CNH Industrial (CNH.US) rose after hours! Famous investor: Cheap, holding a medium-sized position
1min read David Einhorn, founder and president of Greenlight Capital, said he has a medium-sized position in CNH Industrial (CNH.US), an agricultural machinery company. The news boosted CNH Industrial's shares by more than 8% after-hours on Wednesday. However, the stock has fallen nearly 14% this year, lagging the broader US market.
Einhorn said the agricultural machinery company was an obscure value investment as the industry was nearing the end of a bear market cycle. "This is exactly the kind of thing that no one cares about right now because it's cheap and the news isn't going to be good for a while," he said. "Grain prices are low, and agricultural equipment is ending a down cycle."
Einhorn noted that CNH Industrial pays a dividend yield of more than 4% and is actively buying back stock, with "almost no financial leverage," and "people will start to think about a couple of dollars of earnings at the top of the cycle sometime next year, maybe even in early 2026."
The well-known investor believes demand will recover as older equipment eventually needs replacing. "There was a time when agricultural equipment purchases were booming, and now it's become cyclical depression," he said. "These things come and go."
"This year, the agricultural equipment industry may be down 20% from the average at the end of the cycle, and sometime in three or four years, it may be up 20%. That's just the way these companies work," he added.
