CNH

CNH Industrial ($CNH): Warren Buffett's Son Joins 'Bottom-Buying' Signal

11/19/2025 20:16

CNH Industrial ($CNH) is sending intriguing signals to investors as insiders, including Warren Buffett's son Howard Buffett, have turned aggressive buyers in November after a significant stock decline. CNH Industrial, a global leader in agricultural and construction equipment manufacturing with brands like Case IH and New Holland, has been experiencing the full brunt of the agricultural equipment industry's downturn. The company's Q3 2025 results showed earnings per share plunging 67% year-over-year to $0.08, missing analyst expectations by 38%. While revenue of $4.4 billion declined 5.5% year-over-year, it slightly beat expectations. The most telling story, however, lies in the dramatic shift in insider trading patterns. On March 4, 2025, CEO Gerrit Marx and other executives conducted a coordinated sell-off, with Marx disposing of 320,472 shares worth $3.73 million and CFO Oddone Incisa selling 32,910 shares for $383,072. Similar selling continued in May at prices ranging from $11.64 to $12.70 per share. But November tells a completely different story. Howard Buffett, Warren Buffett's son and CNH director, purchased shares on two consecutive days in November - 6,000 shares at $9.68 and 4,100 shares at $10.29. These prices represent 15-23% discounts to the March-May executive selling prices. Even more striking is director Suzanne Heywood's behavior. After selling shares in both March and May, she made a substantial purchase of 52,522 shares worth $500,009 at $9.52 per share on November 18 - near the year's lows. This insider trading reversal carries significance beyond typical portfolio rebalancing. Howard Buffett's purchases are particularly noteworthy given his agricultural expertise and intimate knowledge of CNH's internal situation as a board member. His buying pattern suggests conviction about the company's prospects at current valuation levels. CNH's stock has fallen approximately 30% from its March high of $13.30, reflecting broader agricultural equipment industry headwinds including declining farm incomes, trade-war-related tariff pressures, and delayed equipment purchases due to high interest rates. However, management has outlined a recovery roadmap. At the May 2025 Investor Day, CNH presented strategic initiatives targeting agricultural segment margins of 16-17% by 2030, up from the current 12.5%. These include organizational restructuring, precision agriculture technology investments, and operational efficiency improvements. Analysts maintain cautious optimism with an average price target of $13.28, implying 39% upside potential. While Fitch downgraded CNH's credit rating from BBB+ to BBB, the outlook remains stable. For investors, the key insight is that insiders are demonstrating buying conviction at what appears to be near-trough valuations. The same executives who sold at peaks are now buying at troughs, suggesting they view current prices as attractive entry points. Risks remain substantial, including CNH's elevated debt-to-equity ratio of 350.48% and modest profit margins of 3.35% compared to peers. The agricultural recovery timeline remains uncertain. Yet insider buying by figures like Howard Buffett - known for long-term investment philosophy - suggests fundamental-based conviction rather than speculative positioning. In an industry facing structural challenges, such contrarian insider activity warrants careful investor attention as a potential bottom signal.