We recently published a list of 10 Best Stocks to Buy According to Billionaire David Einhorn. In this article, we are going to take a look at where CNH Industrial N.V. (NYSE:CNH) stands against other best stocks to buy according to billionaire David Einhorn.

David Einhorn is a highly regarded hedge fund manager, who co-founded Greenlight Capital in 1996. Einhorn shot to fame after he correctly forecasted the collapse of Lehman Brothers during the financial crisis. He graduated from Cornell University and garnered his skills in the hedge fund industry under the mentorship of Gary Siegler and Peter Collery at the SC Fundamental Value Fund. Due to his prowess in long/short equity strategies, David Einhorn is being tagged as one of the most successful hedge fund managers.

Greenlight Capital’s Investment Philosophy

Greenlight Capital specializes in value-oriented strategies. The investment management firm primarily focuses on long and short positions in the listed equity securities and selectively engages in distressed debt investments during favorable economic cycles. Einhorn is a highly-regarded hedge fund manager who uses a long-short investment strategy. Because of this strategy, he can capitalize on both rising and falling markets, providing him flexibility during uncertainties.

The Greenlight Capital funds (the Partnerships) managed to return 7.2% in 2024, net of fees and expenses, as compared to 25.0% for the broader S&P 500 index. However, since the inception of Greenlight Capital, the Partnerships returned 3,117% cumulatively or 12.9% annualized, both net of fees and expenses. Over the same period, the S&P 500 index delivered 1,421% or 10.0% annualized. Notably, Greenlight’s investors earned $5.7 billion, net of fees and expenses, since inception.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

Greenlight Capital’s Views on Current Market Dynamics

CNBC, while quoting the comments of Greenlight Capital’s David Einhorn, mentioned that speculative behavior in the current bull market has reached beyond common sense. As per the firm’s Q4 2024 investor letter, the investors continue to experience a ‘Fartcoin’ stage of the market cycle. To give a brief context, Fartcoin is a cryptocurrency that came into existence late last year. Apart from trading and speculation, no other obvious purpose is being served and no need that is not being served elsewhere is being fulfilled. Einhorn went on to add that the investors might be leaving the Fartcoin stage of the market and entering the Trump (and Melania) memecoin stage. While the certainty about the possible outcome remains unpredictable, it is going to be wild, says David Einhorn.

Amidst these trends, let us now have a look at the 10 Best Stocks to Buy According to Billionaire David Einhorn.

Our Methodology

To list the 10 Best Stocks to Buy According to Billionaire David Einhorn, we selected the top 10 stocks in Greenlight Capital’s portfolio as per its Q4 2024 13F filing. We settled on the hedge fund’s 10 biggest holdings. Finally, we ranked the stocks in ascending order based on the value of Greenlight Capital’s equity stakes. Additionally, we have mentioned the hedge fund sentiment around each stock, as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A farmer working in a field with the latest farm machinery and tools.

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.”

Overall, CNH ranks 5th on our list of the 10 Best Stocks to Buy According to Billionaire David Einhorn. While we acknowledge the potential of CNH as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than CNH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.