Greenlight Capital, an investment management firm, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. In 2024, the Greenlight Capital funds returned 7.2% net of fees and expenses, compared to 25.0% for the S&P 500 index. The Partnerships have returned 3,117% cumulatively or 12.9% annualized both net of fees and expenses, since its inception in May 1996. The S&P 500 index has returned 1,421% or 10.0% annualized, over the same period. Election uncertainty dominated 2024, and now that the election is over, it seems like there is more uncertainty than ever before. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Greenlight Capital highlighted stocks like CNH Industrial N.V. (NYSE:CNH) in its Q4 2024 investor letter. CNH Industrial N.V. (NYSE:CNH), is an equipment and services company, that engages in the design, production, marketing, sale, and financing of agricultural and construction equipment. The one-month return of CNH Industrial N.V. (NYSE:CNH) was 12.60%, and its shares gained 6.28% of their value over the last 52 weeks. On January 22, 2024, CNH Industrial N.V. (NYSE:CNH) stock closed at $12.69 per share with a market capitalization of $15.85 billion.
Greenlight Capital stated the following regarding CNH Industrial N.V. (NYSE:CNH) in its Q4 2024 investor letter:
“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 CNHs 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.”
CNH Industrial N.V. (NYSE:CNH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held CNH Industrial N.V. (NYSE:CNH) at the end of the third quarter which was 30 in the previous quarter. CNH Industrial N.V.’s (NYSE:CNH) consolidated revenues were down 22% in the third quarter of 2024 compared to Q3 2023. While we acknowledge the potential of CNH Industrial N.V. (NYSE:CNH) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed CNH Industrial N.V. (NYSE:CNH) and share the list of best heavy equipment and industrial machinery stocks to buy. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.