10 Best Specialty Chemical Stocks To Buy Now

5. American Vanguard Corporation (NYSE:AVD)

Upside Potential: 184%

Number of Hedge Funds Holders: 19

The next stock on our list of the 10 Best Specialty Chemical Stocks To Buy Now is American Vanguard Corporation (NYSE:AVD). It develops and markets specialty chemicals for use in the agriculture, commercial and consumer segments. The company also produces biological and chemical products for crop applications. Based in California, the company distributes its products with the help of national distribution companies and sales offices.

The company reported net sales of $128.2 million in the second quarter of 2024 which are slightly lower than the sales of $132.8 million of the second quarter in 2023. However, half-year sales of 2024 were higher with $263.4 million reported in the first half of 2024 compared to $257.7 million in the prior year. It recorded a double-digit sales increase in the non-crop and green solutions business. This increase was driven by stronger demand in Central America.

Although the sales registered a growth, the profitability of American Vanguard Corporation (NYSE:AVD) declined, as adjusted EBITDA of $6.2 million reported in second quarter of 2024 was lower than $10.7 million in the prior year. This decline was driven by one-time costs, including severance of the former CEO as well as restructuring costs.

Despite the one-time nature of these costs, the company announced immediate steps to improve liquidity and cost structure. It has also set in motion multiple initiatives to reduce inventory downward and maximize cash. Nevertheless, American Vanguard Corporation (NYSE:AVD) announced a cash dividend of $0.03, reflecting the financial strength of the company.

The company faced a challenging situation when it had to cancel all registrations for its Dacthal herbicide products following a suspension order from EPA (Environmental Protection Agency). Despite its reservations with the EPA decision, the company is prioritizing the removal of product from market.

Meanwhile, 19 hedge funds have collectively invested $43 million in the company’s stock. Additionally, three analysts have forecasted an upside potential of 184% in the share.