10 Best Specialty Chemical Stocks To Buy Now

2. Orion S.A. (NYSE:OEC)

Upside Potential: 52.14%

Number of Hedge Funds Holders: 30

Orion S.A. (NYSE:OEC) manufactures and sells carbon black products. The company operates through two segments: Rubber Carbon Black and Specialty Carbon Black. Orion serves printing, fiber, batteries, polymers, and coatings sectors.

Orion S.A. (NYSE:OEC) has registered revenue of $477 million in the second quarter of 2024, which is a 3.97% increase on a YoY basis. This was due to an increase in the volume of Specialty Carbon segments on the back of higher oil prices and enhanced price agreements. However, the gross profit of the company fell by $7.3 million, mainly on account of higher fixed costs, and declined co-generation efficiency.

However, the company is anticipating EBITDA of $315 million to $330 million by the end of the year, mainly based on a 17% volume increase in the Specialty Carbon Black segment, across multiple regions and markets. According to analysts, the specialty carbon black segment will increase at a CAGR of  7% because of the adoption of lithium-ion batteries, and increased demand in agriculture stretch wrap.

In addition to increased demand for its products, the company is focused on achieving sustainability goals as well. In the annual sustainability report published at the end of 2023, Orion announced the opening of a Battery innovation center for experimentation on Lithium-ion batteries, and eventually shifting to electrification. According to the White House, the Environmental Protection Organization introduced a fund of $27 billion in  May 2024. This fund will act as a greenhouse reduction fund to enhance the investments in clean energy projects, which can directly benefit Orion S.A.

The company has also announced an interim dividend of $0.02 per share, which depicts the stronger financial position of the compay. In May 2024, the company also announced its investment to upgrade the alpha carbon facility, which will deal with 500,000 metric tons of discarded tires. Anticipating these investments, three analysts have anticipated that the share can show an upside of 52.14%. Moreover, 30 hedge funds are bullish on the stock as of Q2 2024, which is up by one hedge fund from Q1.