CNH Industrial (CNH) Looks Undervalued: Why Moerus Is Betting on a Farm Equipment Recovery

Moerus Capital Management LLC recently shared its views on CNH Industrial N.V. in its second-quarter 2026 investor letter. The fund recognized the growing excitement around artificial intelligence and technology, which led to a surge in growth stocks and a shift away from more value-oriented investments. As a result, Moerus' Institutional Class returned just 0.14% in Q2 2026, compared to 14.49% for the MSCI ACWI ex USA and 14.93% for the MSCI ACWI.

The fund's first-half return was 5.37%, while the benchmarks delivered 13.69% and 11.25%, respectively. The underperformance was primarily due to the Fund's limited exposure to Information Technology and Energy sector investments, which have recently experienced gains. Despite these challenges, Moerus remains optimistic about the long-term potential of unpopular businesses and assets at substantial discounts to their intrinsic value.

CNH Industrial N.V., a leading manufacturer of specialized farming and construction equipment, was highlighted as one such opportunity. The company's shares have shown impressive one-month returns of 30.96%, with a trading range between $9.00 and $14.46 over the last 52 weeks. Currently, CNH Industrial N.V.'s stock trades at around $14.40 per share, boasting a market capitalization of approximately $22.02 billion.

Moerus' analysts noted that CNH Industrial operates in an oligopoly, with the company being the second-largest original equipment manufacturer behind John Deere for high-horsepower agricultural machinery. Although the fund isn't on the list of 40 most popular stocks among hedge funds for 2026, it has initiated a position in CNH Industrial N.V.

Holding the stock is based on the belief that AI stocks may offer higher returns in a shorter timeframe.