Longleaf Partners, managed by Southeastern Asset Management, released its “Partners Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned -6.31% in the second quarter, compared to S&P’s 4.28% return and Russell 1000 Value’s -2.17% return. There weren’t enough big winners in the portfolio, and the relative performance was disappointing because there were more 10%+ decliners. Conversely, the stock price declines were overreactions, and as a result, the quarter’s aggregate value per share performance exceeded the stock price performance. For more information on the fund’s best picks in 2024, please check its top five holdings.
Longleaf Partners Fund highlighted stocks like CNH Industrial N.V. (NYSE:CNH) in its Q2 2024 investor letter. CNH Industrial N.V. (NYSE:CNH), is an equipment and services company, that engages in the design, production, marketing, sale, and financing of agricultural and construction equipment. The one-month return of CNH Industrial N.V. (NYSE:CNH) was 1.09%, and its shares lost 28.64% of their value over the last 52 weeks. On July 25, 2024, CNH Industrial N.V. (NYSE:CNH) stock closed at $10.24 per share with a market capitalization of $12.877 Billion.
Longleaf Partners Fund stated the following regarding CNH Industrial N.V. (NYSE:CNH) in its Q2 2024 investor letter:
“CNH Industrial N.V. (NYSE:CNH) – Agricultural machinery company CNH Industrial was a detractor in the quarter for two main reasons. First, the global ag equipment market went into the year depressed yet has still underperformed expectations, driven by weaker commodity prices and higher interest rates. Second, CEO Scott Wine’s departure, for personal reasons, has created a temporary management transition headwind. Despite these challenges, we remain optimistic about CNH’s long-term prospects. It is a high-quality business with pricing power in a consolidating market. Its equipment and precision technology are essential for increasing farm productivity and meeting global food demand amidst constrained land and labor inputs. CNH is executing well, gaining market share, and improving underlying margins. We also believe that the largest holder of CNH, our highly aligned partners at EXOR (which is a holding in our Global and International strategies), will continue the company along its path of FCF per share growth and increased focus on its core business. CNH is undervalued at 7 times earnings and is committed to returning 100% of FCF to shareholders through dividends and buybacks.”
A tractor plowing a field in the warm golden light of a setting sun.
CNH Industrial N.V. (NYSE:CNH) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held CNH Industrial N.V. (NYSE:CNH) at the end of the first quarter which was 29 in the previous quarter. While we acknowledge the potential of CNH Industrial N.V. (NYSE:CNH) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed CNH Industrial N.V. (NYSE:CNH) and shared Oakmark Global Select Fund’s views on the company. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
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