10 Worst Specialty Chemical Stocks to Buy According to Short Sellers

7. Tronox Holdings plc (NYSE:TROX)

Number of Hedge Fund Holders: 18

Short % of Shares Outstanding: 2.98%

Tronox Holdings plc (NYSE:TROX), headquartered in Stamford, Connecticut, is a global leader in producing premium titanium products, including titanium dioxide pigment, specialty-grade titanium dioxide, high-purity titanium chemicals, and zircon. Its products are widely used in the production of paints, coatings, plastics, paper, and various other applications.

In Q2 2024, Tronox Holdings plc (NYSE:TROX) reported $820 million in revenue, a 3% YoY increase, primarily driven by higher TiO2 volumes, which were up 16%. While pricing pressure resulted in an 8% decline in TiO2, strong demand across all regions helped offset the impact. Zircon volumes remained stable, with modest pricing improvements.

The company posted a net income of $10 million for the quarter, significantly rebounding from last year’s loss, as a result of improved production efficiency, reduced material cost, and cost-saving measures such as lower freight expenses and favorable foreign exchange rates.

From a liquidity standpoint, Tronox Holdings plc (NYSE:TROX) remained strong in the quarter, with $680 million in available liquidity, including $201 million in cash. The company generated $84 million in free cash flow, and capital expenditures for the quarter totaled $76 million – primarily invested in strategic growth projects.

In June 2024, Tronox partnered with NOA Group for a renewable energy project, supplying approximately 497GWh of wind and solar power to its South African operations by 2027. This will cut global emissions by 12% and help meet Tronox’s goal of net-zero emissions by 2050.

In terms of price movement, Tronox saw a 6.11% dip over the past month and a 4.98% drop in YTD. This can be attributed to a combination of pricing pressures in the TiO2 market, operational challenges related to ramping up production, and broader market volatility.

Despite these challenges, as of Q2 2024, a total of 18 hedge funds, with a combined investment of $131.7 million, remained bullish on the stock, according to Insider Monkey’s database.