10 Best Materials Stocks to Buy According to Hedge Funds

2. The Sherwin-Williams Company (NYSE:SHW)

Number of Hedge Fund Investors  in Q1 2024: 78

The Sherwin-Williams Company (NYSE:SHW) is one of the biggest chemical companies in the world. It serves consumer and industrial markets through paints, industrial coatings, and other products. The Sherwin-Williams Company (NYSE:SHW) has sizeable exposure to the home improvement market, which means that as long as rates remain high and inflation continues to squeeze budgets, the firm will continue to see a tough market. However, the The Sherwin-Williams Company (NYSE:SHW)’s size and scale, as evidenced by $276 million in cash and $2.7 billion in receivables allow it to have sizeable resources at its disposal to ride out any storms. As it waits for the market to recover, The Sherwin-Williams Company (NYSE:SHW) is currently focusing on deepening its partnerships with home builders and property managers by entering into exclusive contracts. Once demand recovers, these could provide the firm with the right platform to capture sales growth.

The Sherwin-Williams Company (NYSE:SHW) commented on its customer centric approach during the Q1 2024 earnings call where management shared:

As I said earlier, our doors are open. We are not distracted. You can expect us to be very aggressive here. In addition to our stores platform and team of experienced reps and store managers, we’re driving customer stickiness through our digital initiatives. In March, we had the highest number of pro plus users ever engaging with our platform, along with a near record number of new registrations. We have opened our Tournus France packaging plant which will support customers converting to non-BPA coating to meet the European Commission’s 2026 mandate. We expect on multiple new infrastructure and mega projects that are gaining momentum. And we’re introducing multiple new products in both the architectural and industrial businesses to drive our customers’ success.

Obviously, we’re not going to share everything that we’re doing for competitive reasons, but you can be certain that there’s a long list of actions that we are taking in addition to these items. The key takeaway is this, at some point the demand logjam in multiple end markets is going to break. We will be there to capitalize. We’re very confident it’s a matter of when, not if.