Recently the coalition between CNH Capital, an operating unit of
CNH Global N.V.
AmTrust Financial Services, Inc.
) was strategically extended. The companies will be jointly
involved in augmenting CNH Capital's insurance products and
financial service offerings.
This alliance would generate several long-term licensing and
service contracts for CNH Capital. Moreover, according to this
agreement, CNH Capital Insurance Agencies which includes CNH
Capital Insurance Agency Inc. and CNH Capital Canada Insurance
Agency, Ltd. will be acquired by AmTrust.
This conflation would not only ossify ties between CNH Global
and AmTrust, but also substantially proliferate CNH Capital's
market share globally, especially across North America. There is
also a huge opportunity for CNH Global to grow steadily in future,
deriving much from burgeoning demand for its diverse product
Earlier, CNH Global reported revenue of $4.64 billion, up 22.2%
year over year in the first quarter of fiscal 2012. The rise was
primarily attributable to trading profitability achieved in the
agricultural equipment segment and the surge in American
construction equipment sales during the quarter.
As the company traverses through 2012, it looks forward to an
overall accelerated performance with such noteworthy advances. CNH
Global's GAAP revenues are expected to grow around 5% in fiscal
2012 with operating margins above 8.6%.
However, it is indeed wise for the company to remain cautious of
its competitors in the industry as they are also proactive on
implementing market expansion strategies and constructive measures.
Ominous threats in the industry include
Deere & Company
Briggs & Stratton Corp.
The current Zacks Consensus Estimates for the second quarter of
2012 and for fiscal 2012 are $1.52 and $4.69, respectively. The
company currently retains a Zacks #2 Rank, which translates into a
short-term Buy rating. We are maintaining a long-term Outperform
recommendation on the stock.
AMTRUST FIN SVC (AFSI): Free Stock Analysis
BRIGGS & STRATT (BGG): Free Stock Analysis
CNH GLOBAL NV (CNH): Free Stock Analysis Report
DEERE & CO (DE): Free Stock Analysis Report
KUBOTA CORP ADR (KUB): Free Stock Analysis
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