2. PPG Industries, Inc. (NYSE:PPG)
Bridgewater Associates’ Stake Value: $39.6 million
Percentage of Bridgewater Associates’ 13F Portfolio: 0.23%
Number of Hedge Fund Holders: 35
PPG Industries, Inc. (NYSE:PPG) is a specialty materials provider that focuses on providing coatings to industrial users. The company sells coatings, solvents, adhesives, engineered materials, and chemical management services, among others, to a variety of industries. These include the automotive and commercial fleet repair sectors, alongside the aviation industry, metal fabricators, and ship manufacturers.
Mr. Dalio’s Bridgewater Associates owned 230,142 PPG Industries, Inc. (NYSE:PPG) shares as Q4 2021 came to an end. These were worth $39.6 million and represented 0.23% of its portfolio. During the same time period, 35 of 924 hedge funds polled by Insider Monkey had stakes in PPG Industries, Inc. (NYSE:PPG).
By the end of its fiscal fourth quarter, PPG Industries, Inc. (NYSE:PPG) had earned $4.19 billion in revenue and $1.26 in non-GAAP EPS, beating estimates for both. Jefferies lowered the company’s share price target to $130 from $170 in March 2022, stating that increasing energy prices will negatively impact the company’s margins.
PPG Industries, Inc. (NYSE:PPG)’s largest shareholder is Jean-Marie Eveillard’s First Eagle Investment Management who owns 1 million shares worth $184 million.
Heartland Advisors mentioned PPG Industries, Inc. (NYSE:PPG) in its Q4 2021 investor letter. Here is what the fund said:
“A material advantage. While higher input costs and supply chain bottlenecks were a common theme across many industries, some areas were better suited than others to pass along price increases and navigate logistical challenges. The Materials sector is one example. 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 refinishing and original equipment manufacturing (OEM), aerospace, and general industrial. The company is second only to Sherwin-Williams in the architectural coatings market.
Shares of PPG lagged sector peers in early autumn after management warned that earnings would come in lower than expected for the third quarter and withdrew sales guidance for the period. Shortages of key coating ingredients have tightened inventories and caused costs to rise. Externally, customers, including those in the automotive industry, have slowed production as they grapple with their own supply chain issues. The moves have had a chain reaction resulting in a decline in orders for PPG products.
The company has responded to the above headwinds by aggressively raising per-unit pricing including a 6% increase in the fourth quarter and another hike planned for the first quarter of 2022. PPG’s stock responded favorably as real-time indicators suggest cost pressures may be at or near a peak.
Despite PPG being a provider of key components for its customers and uniquely positioned to benefit from the shift toward electric vehicles (EVs), the company trades at a discount to historical levels against both the S&P 500 and its peers.”
