10 Best Stocks to Buy According to Eminence Capital’s Ricky Sandler

2. Ashland Inc. (NYSE:ASH)

Number of Hedge Fund Holders: 25   

Eminence Capital’s Stake: $319,895,893

Ashland Inc. (NYSE:ASH) provides additives and specialty ingredients in North and Latin America, Europe, Asia Pacific, and internationally. In April, the firm posted earnings for the second quarter of 2024, reporting earnings per share of $1.27, beating market expectations by $0.14. The revenue over the period was $575 million, down 5% compared to the previous year  but in-line with estimates. In guidance numbers, the firm said it expected sales in the range of $560 million to $580 million and adjusted EBITDA in the range of $138 million to $148 million in the third quarter. For the full fiscal year, the firm expected sales in the range of $2.150 billion to $2.225 billion and adjusted EBITDA in the range of $470 million to $500 million.

Eminence Capital has consistently maintained a stake in Ashland Inc. (NYSE:ASH) since the second quarter of 2019. At the end of the first quarter of 2024, this stake represented 4.53% of the total 13F portfolio, despite a 7% quarter-over-quarter reduction by Sandler. At the end of the first quarter of 2024, 25 hedge funds in the database of Insider Monkey held stakes worth $616 million in Ashland Inc. (NYSE:ASH), compared to 21 the preceding quarter worth $609 million.

In its Q2 2023 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Ashland Inc. (NYSE:ASH) was one of them. Here is what the fund said:

“Our bottom contributors in Q2 included Ashland Inc. (NYSE:ASH) and Cal-Maine Foods. Ashland is a high-quality, specialty ingredients company providing both natural and synthetic ingredients to customers in the pharmaceuticals, home and personal care, and coatings industries. During Q2, Ashland’s customers — primarily distributors — destocked, which in turn led management to lower full-year guidance and pressured shares. However, in our view, destocking tends to exaggerate any end-market weakness, and we anticipate any effects should be transitory and minimally impact the company’s intrinsic value.”