Between the hiring of a new CEO and a broader run in heavy machinery stocks, I can't say that CNH Industrial (CNHI) hasn't performed over the past year, with the shares up over 55%. With the shares only just back to where they were in early 2018, though, there have certainly been some issues with the business in recent years, including inconsistent execution in agriculture and more structural challenges in the construction business.
I believe the new CEO, Scott Wine, has a good plan for improving the ongoing ag and construction operations (the on-highway operations are going to be spun off or sold), and it's important to remember that CNH doesn't have to catch up to Caterpillar (CAT) or Deere (DE) in terms of operational performance for the shares to still work from here. Between internal self-improvement opportunities and stronger markets for heavy machinery in the ag and construction markets, I believe CNH shares still have some upside after this big move, and it's a name worth considering.
Taking A Simpler Approach To The Business
Stock prices may lie in the short term (or at least reflect only one side of a story), but over time they usually tell the truth of a business's performance. To that end, CNH shares have significantly underperformed the likes of AGCO (AGCO), Caterpillar and Deere over the last seven years, and underperformed Japanese rivals like Komatsu (OTCPK:KMTUY) and Kubota (OTCPK:KUBTY) to a lesser extent, with the company having multiple issues across the business.
At the segment level, the company has suffered from inconsistent R&D and marketing investments in the ag business, aggravating dealers and threatening some of the company's hard-won share in tractors and combines. In construction, CNH has suffered from an assortment that was simply too large and where the company wasn't getting sufficient value for what
