NEW YORK — Greenlight Capital’s David Einhorn said Wednesday he has taken a mid-sized stake in agriculture company CNH Industrial.
Speaking on CNBC Deliver Alpha Speaking at a conference in New York City, the hedge fund investor said the agricultural machinery company is an understated value company as the industry nears the end of a bear cycle.
“That’s exactly what absolutely no one cares about right now because it’s cheap and the news isn’t going to be good for some time to come. Agricultural prices are low and farm equipment is coming out of a down cycle,” Einhorn told CNBC host Rice Leslie Picker said on the panel.
CNH shares rose more than 7% in after-hours trading after his remarks.
CNH Industrial, year to date
Einhorn noted that CNH (formerly Case New Holland) is a heavy dividend payer with a yield of over 4%, while the company is actively repurchasing stock.
“The financial leverage is very small. Sometime next year, maybe even early 2026 … people will start to envision a few dollars of gain in the top cycle,” Einhorn said.
The high-profile investor believes demand is expected to pick up as aging equipment eventually needs to be replaced.
Greenlight Capital President David Einhorn speaks at the 14th CNBC Delivery Alpha Investor Summit on November 13, 2024 in New York City.
Adam Jeffery | CNBC
“There was a period where there was a bit of a boom in farm equipment buying, and now it’s turned into a cyclical depression. These things come and go,” Einhorn said. “This year, when the whole recycling is over, farm equipment prices Probably 20% below average. Sometime in three or four years, it could be 20% higher. That’s the nature of how these businesses operate.”
Industrial stocks have significantly underperformed the market this year, falling more than 17%.
