October 12, 2023

CNH Industrial: good and trusted products

CNH Industrial: good and trusted products

Population growth calls for agricultural products demand to grow as well: OECD predicts constant, albeit somewhat smaller growth in the following period. This, combined with green Obermatt ranks, makes CNH Industrial, a producer of agricultural machinery, currently a good match for our Europe Value Wikifolio.

If you don’t feel safe investing in individual stocks for your portfolio, take a look at the Obermatt Swiss Pearls Index ETP: a new financial product consisting of 36 of the best performing Swiss stocks according to the Obermatt 360° View.

Let’s dig deeper into our buy decision.

PRO: These three points speak for a buy:

  1. Green Obermatt ranks. The 360° View is at 82, which means that CNH’s overall performance is better than 82% of similar European companies.
  2. CNH’s different businesses produce some of the world’s best known agriculture equipment through brands like Case IH and New Holland. These machines are of high quality, according to farmers’ and companies’ testimonials.
  3. Their recent acquisition of Hemisphere GNSS, a Chinese-based satellite positioning company, gives them direct access to technologies enabling higher levels of automation for their products, which boosts long-term competitiveness. CNH’s subsidiaries now also offer fully electric and automated tools and machines, including tractors and combines. They have recently launched the world's first accessible tractor: it has been designed for people with lower limb disabilities.

CONTRA: These three points argue against it:

  1. Obermatt Growth Rank for CNH Industrial is yellow at 39 and this is due to low revenue growth. Sales numbers may be lower from time to time, as not all companies and farmers are ready or willing to buy new equipment and the machinery market is fluctuating.
  2. CNH Industrial plans to leave the Milan stock exchange next year, leaving its shares traded only at NYSE. If you are trading in the US, it is an even better buy.
  3. The disadvantages of investing in industrial stocks include the vulnerability to economic slowdowns and supply chain exposures.

In our opinion, CNH Industrial is a good buy, especially if you are trading in the United States. Currently, we have chosen it for our Europe Value Wikifolio: check it out and help us shape it by joining our free Coffee Break Chats.

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