7. Chemours Co. (NYSE:CC)
Upside Potential as of March 3: 47.16%
Number of Hedge Fund Holders: 40
Chemours Co. (NYSE:CC) delivers a range of performance chemicals globally. It operates through Thermal & Specialized Solutions, Titanium Technologies, and Advanced Performance Materials segments. It serves various industries from refrigeration and coatings to advanced materials. It utilizes direct and indirect sales channels to reach its customers.
The company’s primary growth driver is its Thermal & Specialized Solutions (TSS) segment, particularly Opteon Refrigerants. This segment focuses on producing and selling refrigerants. The Opteon Refrigerants are a key product line which are designed to replace older and environmentally harmful refrigerants with more sustainable alternatives. In Q4 2024, TSS net sales hit a record $390 million, which was an improvement of 3% year-over-year. Opteon sales alone surged 23%.
The company expanded Opteon capacity at Corpus Christi by 40%, with half available in 2025 and the rest in 2026. This supports Chemours Co.’s (NYSE:CC) anticipated double-digit Opteon growth in 2025. In the first quarter of 2025, TSS sales are expected to rise sequentially due to Opteon. Full-year 2025 results should also improve due to the same reasons.
Buckley Capital sees strong growth and high-profit potential in the company’s TSS division due to its environmentally friendly, high-margin Opteon product. It stated the following regarding Chemours Co. (NYSE:CC) in its Q3 2024 investor letter:
The Chemours Company (NYSE:CC) is an investment we have owned since 2018, very profitably until this year. It is composed of 3 different businesses – TSS, APM, and TT – that are each the #1 or #2 players in their respective categories.
The company’s Thermal & Specialized Solutions division (TSS) sells environmentally friendly refrigerants on a global basis, with the primary refrigerants being Opteon and Freon. Opteon is more environmentally friendly, therefore Freon is being slowly phased out by government mandate. This is very beneficial for Chemours since Opteon is very high-margin and has little competition, whereas Freon has more competitors and overall lower margins. This should lead to high single-digit growth in the TSS segment, with 30%+ EBITDA margins. We believe it is possible TSS margins could get to 40%, given that they have neared that number in the past and that as Chemours sells more Opteon, its margins should trend higher. This means TSS should be able to earn around $800m in EBITDA in the next 2 years…” (Click here to read the full text)