Billionaire Mason Hawkins’s Southeastern Ups CNH Global NV (CNH) Stake to 12%

CNH’s peers include Caterpillar Inc. (NYSE:CAT), Joy Global Inc. (NYSE:JOY), Deere & Company (NYSE:DE), and AGCO Corporation (NYSE:AGCO). Trailing earnings multiples for this peer group are between 8 and 12, showing that CNH is not that out of the ordinary compared to similar companies and financial markets are expressing skepticism on each company. Caterpillar Inc. (NYSE:CAT) actually had a quite poor Q1, in which revenue was down 17% compared to a year ago and net income fell 45%. With the sell-side expecting a similar level of earnings growth there, CNH Global NV (NYSE:CNH) might be a better buy than its larger peer. Joy Global Inc. (NYSE:JOY)’s business has been about flat, and once again- despite what is an anticipated dip in earnings over the next year, we get a PEG ratio of just below 1. Deere and AGCO Corporation (NYSE:AGCO), which focus more on agricultural machinery as opposed to that for construction or industrial functions, each experienced moderate revenue growth in their most recent quarter compared to the same period in the previous fiscal year. Only Deere & Company (NYSE:DE), however, was able to convert that improvement to the bottom line as AGCO Corporation (NYSE:AGCO) saw a small decline in earnings. Read another take on how CNH measures up to some of these other companies.

CNH and its peers are certainly cheap, though as we’ve mentioned this is partly explained by the relationship between construction and macro factors. The company does look a bit cheaper than Caterpillar Inc. (NYSE:CAT), and with better recent results as well we’d be interested in learning more about the company. Deere & Company (NYSE:DE) might be an even more promising target for future research, however, given its more broadly based improvement in financials and its potential to be less affected by any poor economic news.

Disclosure: I own no shares of any stocks mentioned in this article.