David Einhorn (Trades, Portfolio), the contrarian hedge fund legend behind Greenlight Capital, just made waves by revealing a fresh position in CNH Industrial (NYSE: CNHI), sending the stock up over 7%. Einhorn didn't hold back, calling the agricultural equipment maker "cheap" and underappreciated. “Nobody cares about it right now because the news isn't great,” he told a packed room at CNBC's Delivering Alpha conference. But that's exactly the kind of setup Einhorn loves. With CNH trading at just 10 times its projected 2025 trough earnings of $1 per share, Einhorn sees upside potential of up to $2 EPS in the next upcycle. Translation? He thinks the stock could double.

What's fueling his optimism? CNH's fundamentals are rock-solid, even in a down cycle. The company is handing investors a 4.7% dividend yield and buying back stock while maintaining minimal financial leverage. Einhorn sees a cyclical rebound coming, driven by aging farming equipment and eventually higher crop prices. For context, agricultural equipment sales have been 20% below average this year—but cycles flip. “Three or four years from now, it'll probably be 20% above,” Einhorn quipped, highlighting the boom-bust nature of farming machinery. Investors patient enough to weather the current storm could be well-rewarded when farmers inevitably upgrade their fleets.

Einhorn's bet on CNH also underscores his broader view of the market. He acknowledges the struggles of value investing in a world dominated by growth stocks but remains confident in spotting diamonds in the rough. “These things come and they go,” he noted, reinforcing his belief in long-term cycles. With a dividend to cushion the wait and a business primed for recovery, CNH Industrial might just be the quiet win investors didn't see coming. For Einhorn, it's another classic play: find value where no one else is looking and ride the wave when sentiment shifts.