11 Best Small Cap Chemical Stocks to Buy According to Hedge Funds

6. LSB Industries Inc. (NYSE:LXU)

Market Capitalization: $636.71 Million

Number of Hedge Fund Holders: 18

LSB Industries Inc. (NYSE:LXU) is a chemical company that specializes in manufacturing ammonia and ammonia-related products. The company serves the agricultural, industrial, and mining sectors. In the third quarter of 2024, LSB Industries Inc. (NYSE:LXU) reported net sales of $109.2 million, a slight decrease from $114.3 million in the same quarter last year. However, the company achieved an impressive adjusted EBITDA of $17.5 million, up from $9.2 million in Q3 2023.

During the third quarter, LSB Industries Inc. (NYSE:LXU) invested $31 million in capital expenditures to enhance reliability and expand urea ammonium nitrate (UAN) capacity at its Pryor facility. This expansion is expected to increase UAN production by approximately 75,000 tons per year, representing a 20% boost in annual capacity. The company has already begun to see these production increases in the fourth quarter.

The company is focused on low-carbon ammonia projects. The El Dorado CCS project aims to produce low-carbon ammonia by 2026, pending necessary permits. Additionally, LSB Industries Inc. (NYSE:LXU) is advancing its Houston Ship Channel project, which will be a world-scale ammonia plant capable of producing about 1.1 million metric tons of low-carbon ammonia.

With strategic investments in production capacity and a commitment to sustainability, LSB Industries Inc. (NYSE:LXU) is well-positioned for future growth. The ongoing expansion projects and focus on low-carbon products align with market trends toward greener solutions. This makes LXU an attractive stock for investors looking for growth potential in the chemical sector.