15 Best Beaten Down Stocks to Invest In

10) Celanese Corporation (NYSE:CE)

% Decline on a YTD Basis: ~54.9%

Number of Hedge Fund Holders: 15

Celanese Corporation (NYSE:CE), a chemical and specialty materials company, is engaged in manufacturing and selling high-performance engineered polymers in the US and internationally.

Celanese Corporation (NYSE:CE) continues to encounter challenges related to weakening demand, and an uncertain macroeconomic environment. Furthermore, the company’s guidance for Q4 2024 further weighed over the investors’ sentiments, projecting adjusted EPS of ~$1.25, significantly below the analysts’ estimate of $2.94.

However, industry experts opine that Celanese Corporation (NYSE:CE)’s global presence, high-margin product portfolio, cost-cutting measures, and inventory management strategies are expected to act as key strengths.  The company’s high-quality acetyls business and engineered materials segment are viewed as valuable assets possessing healthy margin potential.

Furthermore, the full synergies from the M&M acquisition should materialize once market volumes recover. Through the combination of M&M’s broad range of engineered materials with Celanese Corporation (NYSE:CE)’s existing offerings, the acquisition will create a comprehensive product portfolio catering to automotive, electronics, medical, and industrial applications. Furthermore, M&M’s strong presence in Asia and Europe complements Celanese Corporation (NYSE:CE)’s global footprint.

As demand recovers, mainly in the automotive and industrial sectors, Celanese Corporation (NYSE:CE) might experience significant operating leverage, potentially leading to earnings growth. Vltava Fund, an investment management company, recently released its Q1 2024 investor letter. Here is what the fund said:

“We sold three positions: Lockheed Martin, LabCorp, and Celanese Corporation (NYSE:CE). Both LabCorp and Lockheed were large positions for us at the time, and their returns had a positive material impact on the performance of the overall portfolio. Celanese, on the other hand, was always a small position, and so, despite the good returns it achieved, its impact on the portfolio’s overall return was negligible. We had bought Celanese shortly after the company had announced a large acquisition of DuPont’s broad portfolio of engineering thermoplastics and elastomers. This acquisition, while strategically sound, was overpriced in our opinion. Many investors apparently thought the same thing, as the stock reacted by dropping significantly to USD 90 in the following months. This decline nevertheless seemed excessive to us, and we therefore included Celanese stock into our portfolio. At the price of around USD 150 during March of this year, we felt, first, that our original investment hypothesis of a valuation correction had been fulfilled and, second, that the valuation was roughly in line with the company’s value. We therefore sold the stock.”