CNH Industrial (CNHI, Financial) (2%, 0.11%), a leading farm equipment and commercial vehicle manufacturer globally, was the top contributor for the quarter. CNH reported strong first half results and meaningfully upgraded its sales and FCF guidance for the year. After years of serving as a headwind, the ag cycle is now firmly in CNH’s favor, driven by commodity price strength, healthy farm balance sheets, advanced technology adoption and aging fleet feeding replacement demand. CNH is in the process of spinning off its on-highway business (which includes its IVECO commercial vehicles and FPT powertrain segments), which will create a pure play off-highway company (comprised of the agricultural, construction and specialty vehicles businesses). The spin-off is expected to be completed by early 2022 and should lead to a narrowing of the discount to net asset value once we have two focused companies valued at peer multiples.
From Mason Hawkins (Trades, Portfolio)' Longleaf Partners Fund third-quarter 2021 commentary.