In this article, we discuss the 5 best chemical stocks to buy according to Jonathan Barrett and Paul Segal’s Luminus Management. If you want to see our detailed discussion detailing future growth catalysts for major chemical stocks, go directly to the 10 Best Chemical Stocks to Buy According to Jonathan Barrett and Paul Segal’s Luminus Management.
5. PPG Industries, Inc. (NYSE:PPG)
Barrett and Segal’s Stake Value: $7,506,000
Percentage of Jonathan Barrett and Paul Segal’s 13F Portfolio: 1.09%
Number of Hedge Fund Holders: 26
PPG Industries, Inc. (NYSE: PPG) is an American Fortune 500 company and global supplier of paints, coatings, and specialty materials. With headquarters in Pittsburgh, Pennsylvania, PPG Industries, Inc. (NYSE: PPG) operates in more than 70 countries around the globe. By revenue, it is the largest coatings company in the world.
This July, Susquehanna analyst Sandy Klugman upgraded PPG Industries, Inc. (NYSE: PPG) to Positive from Neutral with a price target of $190, up from $115. PPG Industries, Inc. (NYSE: PPG) remains well-positioned to benefit from continued favorable trends across architectural coatings markets and eventual volume recovery in higher-margin end-markets, Klugman told investors in a research note. Further, the company has the potential to recapture deferred demand in auto manufacturing associated with the semiconductor chip shortage, says the analyst.
Based on the latest 13F filings, Jonathan Barrett and Paul Segal’s Luminus Management holds more than 44,000 shares of PPG Industries, Inc. (NYSE: PPG) worth $7.5 million as of the second quarter of 2021. These shares represent 1.09% of Luminus Management’s investment portfolio.
As of the fiscal second quarter of 2021, PPG Industries, Inc. (NYSE: PPG) reported earnings per share of $1.94, missing estimates by -$0.24. The company also generated revenues that amounted to $4.36 billion, up 44.58% year-over-year, and beating estimates by $42.75 million. On top of this, PPG Industries, Inc. (NYSE: PPG) has gained 2.20% over the past 6 months, and 6% year to date.
By the end of the second quarter of 2021, 26 hedge funds out of the 873 tracked by Insider Monkey held stakes in PPG Industries, Inc. (NYSE: PPG) worth roughly $233.7 million. This is compared to 25 hedge funds in the previous quarter with a total stake value of approximately $173.6 million.
Heartland Advisors, an investment management firm, published its “Heartland Mid Cap Value Fund” second-quarter 2021 investor letter, in which it mentioned PPG Industries, Inc. (NYSE: PPG) and discussed its stance on the company. Here’s what they had to say:
“The portfolio’s holdings in the space outperformed the benchmark average and contained a top contributor, PPG Industries Inc. (PPG).
PPG is the second-largest coatings supplier in the world and boasts the top market share in the industrial space, including auto, aerospace, and general industrial. The company is second only to Sherwin-Williams in the architectural coatings market.
Shares of PPG sold off in early 2020 as global economies fell into recession. Given the company’s economically sensitive client base, earnings were hit by a broad-based decline in sales of coatings. While PPG’s stock rallied throughout the middle part of 2020 as fears about the economy subsided, it lagged sector peers throughout the winter because investors began to fear margin pressure fueled by rapidly rising input costs. This weakness presented us with an opportunity to sell a more capital-intensive portfolio holding that lacked pricing power and upgrade the portfolio with PPG, which we view as a higher-quality business.
At the time of our initial investment, we were confident that any margin pressure caused by rising input costs would be offset over time by PPG’s pricing power. Our view was validated when PPG reported growing profit margins in its first-quarter earnings release for 2021.
The company is also uniquely positioned to benefit from the shift toward electric vehicles (EVs). PPG has a robust portfolio of protective coatings for EVs. Given PPG’s supply chain scale, we anticipate the company will see a material increase in content penetration due to the ongoing market adoption of electric vehicles, which should drive organic sales growth going forward.”
4. Sociedad Química y Minera de Chile S.A. (NYSE:SQM)
Barrett and Segal’s Stake Value: $14,763,000
Percentage of Jonathan Barrett and Paul Segal’s 13F Portfolio: 2.14%
Number of Hedge Fund Holders: 19
Sociedad Química y Minera de Chile S.A. (NYSE: SQM) is a Chilean chemical company and a supplier of plant nutrients, iodine, lithium, and industrial chemicals. It is the world’s biggest lithium producer. SQM’s natural resources and its main production facilities are located in the Atacama Desert between Chile’s I and II regions. Sociedad Química y Minera de Chile S.A. (NYSE: SQM) was founded in 1968 and is headquartered in Santiago, Chile.
Based on the latest 13F filings, Jonathan Barrett and Paul Segal’s Luminus Management holds about 312,000 shares of Sociedad Química y Minera de Chile S.A. (NYSE: SQM) worth $14.7 million as of the second quarter of 2021. These shares represent 2.14% of Luminus Management’s investment portfolio.
As of the fiscal second quarter of 2021, Sociedad Química y Minera de Chile S.A. (NYSE: SQM) reported an EPS of $0.31, missing estimates by -$0.01. The company also generated revenues up to $588 million, up 28.24% year-over-year, and beating estimates by 39.46 million. On top of this, the company’s share price has gained 2.87% over the past 6 months and 12.7% year to date.
By the end of the second quarter of 2021, 19 hedge funds out of the 873 tracked by Insider Monkey held stakes in Sociedad Química y Minera de Chile S.A. (NYSE: SQM) worth roughly $156.25 million. This is compared to 16 hedge funds in the previous quarter with a total stake value of approximately $142.4 million.
ClearBridge Investments, an investment management firm, published its “International Growth ADR Strategy” first quarter 2021 investor letter, in which the firm mentioned Sociedad Química y Minera de Chile S.A. (NYSE: SQM) and shared their stance on the company. Here’s what they had to say:
“Among materials names in our structural bucket, we sold SQM as the stock hit our price target. Lithium prices remain at levels well below previous highs and while we expect they may reach higher levels in the future; high pricing likely encourages additional supply onto the market.”
3. Air Products and Chemicals, Inc. (NYSE:APD)
Barrett and Segal’s Stake Value: $14,812,000
Percentage of Jonathan Barrett and Paul Segal’s 13F Portfolio: 2.15%
Number of Hedge Fund Holders: 40
Air Products and Chemicals, Inc. (NYSE: APD) provides atmospheric gases, process and specialty gases, equipment, and services worldwide. The company produces atmospheric gases, including oxygen, nitrogen, and argon among rare gases. It also designs and manufactures equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and liquid helium and liquid hydrogen transport and storage. Air Products and Chemicals, Inc. (NYSE: APD) has a strategic collaboration with Baker Hughes Company to develop hydrogen compression systems. The company was founded in 1940 and is headquartered in Allentown, Pennsylvania.
This June, Societe Generale analyst Peter Clark raised his price target on Air Products and Chemicals, Inc. (NYSE: APD) from $295 to $334 and reiterated a Buy rating on the shares.
Based on the latest 13F filings, Jonathan Barrett and Paul Segal’s Luminus Management holds over 51,000 shares of Air Products and Chemicals, Inc. (NYSE: APD) worth $14.8 million as of the second quarter of 2021. These shares represent 2.15% of Luminus Management’s investment portfolio.
As of the fiscal third quarter of 2021, Air Products and Chemicals, Inc. (NYSE: APD) reported earnings per share of $2.31 missing estimates by -$0.07. The company also generated revenues up to $2.6 billion, up 26.12% year-over-year, and beating estimates by $129.94 million.
By the end of the second quarter of 2021, 40 hedge funds out of the 873 tracked by Insider Monkey held stakes in Air Products and Chemicals, Inc. (NYSE: APD) worth roughly $456.4 million. This is compared to 32 hedge funds in the previous quarter with a total stake value of approximately $586.8 million.
2. Tronox Holdings plc (NYSE:TROX)
Barrett and Segal’s Stake Value: $41,325,000
Percentage of Jonathan Barrett and Paul Segal’s 13F Portfolio: 6.01%
Number of Hedge Fund Holders: 36
Tronox Holdings plc (NYSE: TROX) operates as a vertically integrated manufacturer of TiO2 pigment in North America, South and Central America, Europe, the Middle East, Africa, and the Asia Pacific. Tronox Holdings plc (NYSE: TROX) company operates titanium-bearing mineral sand mines, and beneficiation and smelting operations. Its products include TiO2, zircon, and pig iron, as well as feedstock and other products comprising rutile prime, ilmenite, chloride slag, and other mining products. The company’s products are used for the manufacture of paints, coatings, plastics, and paper, as well as various other applications. Tronox Holdings plc (NYSE: TROX) is based in Stamford, Connecticut.
This September, JPMorgan analyst Jeffrey Zekauskas raised his price target on Tronox Holdings plc (NYSE: TROX) from $26 to $30 and reiterated an Overweight rating on the shares after Reuters reported that Apollo Management made an offer to buy Tronox for $27 per share. Tronox Holdings plc (NYSE: TROX) has neither confirmed nor denied receiving a bid from Apollo, Zekauskas told investors in a research note. He continues to rate Tronox Holdings plc (NYSE: TROX) shares Overweight due to the company’s high level of free cash flow generation, low valuation multiples, and tax characteristics.
Based on the latest 13F filings, Jonathan Barrett and Paul Segal’s Luminus Management holds over 1.84 million shares of Tronox Holdings plc (NYSE: TROX) worth $41.3 million as of the second quarter of 2021. These shares represent 6.01% of Luminus Management’s investment portfolio.
As of the fiscal second quarter of 2021, Tronox Holdings plc (NYSE: TROX) reported an EPS of $0.61, beating estimates by $0.11. The company also generated revenues of $927 million, up 60.38% year-over-year, and beating estimates by $5.88 million. On top of this, the share price for Tronox Holdings plc (NYSE: TROX) has gained 32.68% over the past 6 months, and 70.75% year to date.
By the end of the second quarter of 2021, 36 hedge funds out of the 873 tracked by Insider Monkey held stakes in Tronox Holdings plc (NYSE: TROX) worth roughly $353 million. This is compared to 36 hedge funds in the previous quarter with a total stake value of approximately $320 million.
1. Ashland Global Holdings Inc. (NYSE:ASH)
Barrett and Segal’s Stake Value: $42,841,000
Percentage of Jonathan Barrett and Paul Segal’s 13F Portfolio: 6.23%
Number of Hedge Fund Holders: 28
Ashland Global Holdings Inc. (NYSE: ASH) provides specialty chemical solutions worldwide. The company’s Specialty Ingredients segment offers products, technologies, and resources for solving formulation and product-performance challenges. It provides solutions using natural, synthetic, and semisynthetic polymers derived from cellulose ethers, vinylpyrrolidones, acrylic polymers, polyester, and polyurethane-based adhesives, and plant and seed extracts. Ashland Global Holdings Inc. (NYSE: ASH) was founded in 1924 and is based in Wilmington, Delaware.
This September, BMO Capital analyst John McNulty raised his price target on Ashland Global Holdings Inc. (NYSE: ASH) from $107 to $113 and reiterated an Outperform rating on the shares.
Based on the latest 13F filings, Jonathan Barrett and Paul Segal’s Luminus Management holds over 489,000 shares of Ashland Global Holdings Inc. (NYSE: ASH) worth $42.8 million as of the second quarter of 2021. These shares represent 6.23% of Luminus Management’s investment portfolio.
As of the fiscal third quarter of 2021, Ashland Global Holdings Inc. (NYSE: ASH) reported earnings per share of $0.91, missing estimates by -$0.29. The company also generated revenues that amounted to $637 million, up 10.98% year over year, and beat estimates by $1.61 million. The share price for Ashland Global Holdings Inc. (NYSE: ASH) has gained 1.22% over the past 6 months, and 14.06% year to date.
By the end of the second quarter of 2021, 28 hedge funds out of the 873 tracked by Insider Monkey held stakes in Ashland Global Holdings Inc. (NYSE: ASH) worth roughly $933.4 million. This is compared to 36 hedge funds in the previous quarter with a total stake value of approximately $1.19 billion.
See also 10 Best Material Dividend Stocks To Buy Now and 11 Best Materials Stocks for 2021.
