10 Best Stocks to Buy According to Billionaire David Einhorn

5. CNH Industrial N.V. (NYSE:CNH)

Greenlight Capital’s Stake Value: $115.9 million

Number of Hedge Fund Holders: 42

CNH Industrial N.V. (NYSE:CNH) is an equipment and services company, which is engaged in the design, production, marketing, sale, and financing of agricultural and construction equipment. Citi analyst Kyle Menges upped the company’s price objective to $15, showcasing effective inventory management and positive segment margin guidance amidst lower earnings expectations for 2025. As per the analyst, the trend of destocking is anticipated to continue into H1 2025, with CNH Industrial N.V. (NYSE:CNH)  planning to align production with the retail demand in H2. Overall, the increased price objective demonstrates the higher multiple and the analyst’s confidence that 2025 will represent the trough earnings for the company, hinting at an expectation of recovery thereafter.

Elsewhere, DA Davidson upped the company’s price objective to $14, maintaining a “Neutral” stance as the firm acknowledged CNH Industrial N.V. (NYSE:CNH)’s progress in cost structure improvements. The firm believes that a promising situation has been developing for the company. The company’s past and ongoing efforts to reduce operating costs can partially mitigate the margin erosion. CNH Industrial N.V. (NYSE:CNH) continues to focus on reducing product costs with the help of lean manufacturing principles and strategic sourcing. It plans to carefully manage SG&A and R&D expenses.

Greenlight Capital, an investment management firm, released its Q4 2024 investor letter. Here is what the fund said:

“We established a new medium-sized position in CNH Industrial N.V. (NYSE:CNH) and a small position in Centene (CNC). CNH is a leading manufacturer of tractors, combines and other agricultural equipment. The farm equipment industry is going through a downcycle led by weak commodity prices and we estimate CNH will ultimately generate trough earnings close to $1 per share. We acquired our position at an average price of $10.53 per share, or less than 11x these expected bottom-of-cycle results. Investor sentiment is extremely weak on the view that the bottom is several years away.

We are optimistic that this current downturn will be shorter and shallower than the prior one experienced about a decade ago. First, the industry experienced strikes and supply chain issues over the last few years, tempering peak sales and inventory levels. Second, CNH and its peers took the corrective action of underproducing to end demand and destocking inventories earlier and more aggressively this time around. As a result, we expect CNH’s sales to return to growth sometime in the coming year simply by producing to end demand, even if farmer spending remains weak. In the meantime, CNH pays a 3% dividend and management has committed to returning the remaining free cash flow through buybacks. We estimate that management will be able to repurchase 5-6% of its stock annually. CNH ended 2024 at $11.33.”