We recently published a list of the 11 Most Promising Small-Cap Stocks According to Analysts. In this article, we are going to take a look at where The Chemours Company (NYSE:CC) stands against other promising small-cap stocks.
Robert Teeter of Silvercrest Asset Management recently appeared in an interview to express that he thinks small-cap stocks are currently facing a choppy market, but he also acknowledged that he anticipates a rally later in the year. Based on this sentiment, he advised clients on the importance of diversification within the S&P 500 and pointed to opportunities in international markets. We covered his stance in greater detail in one of our other articles, 10 Best Small-Cap Value Stocks to Buy Now. Here’s an excerpt from it:
“He noted that the Trump trade initially boosted small caps due to expectations of economic acceleration and lower interest rates, both of which are favorable for these companies. However, policy uncertainty and weaker-than-expected economic data have delayed their rally. Teeter believes that small caps will come into their own later in the year, but for now, they are facing a choppy market with significant rotation.”
However, later on March 26, Villere & Co. Portfolio Manager George Young joined ‘Market Domination Overtime’ on Yahoo Finance to discuss why investors should be looking at small-cap stocks. George Young stated that small caps currently appear cheap and have been underperforming relative to larger stocks. He highlighted that small-cap stocks have been inexpensive for a while. To support his stance, he pointed out that last year, the S&P 500 rose about 25%, while small-cap stocks increased by only 11%. He explained that this disparity suggests a regression to the mean at some point, which means that the valuation gap between small caps and large caps should eventually narrow. Young also noted a shift in market dynamics during Q1 of this year. While the S&P 500 was down ~2% then, the S&P 500 excluding the MAG7 stocks was actually up ~2%. He described this change as a relatively usual once, since stock market leadership often rotates between sectors and types of stocks. Young particularly favored the small-cap sector when questioned about long-term and steady investments.
Our Methodology
We sifted through the Finviz stock screener to compile a list of the top small-cap stocks that were trading between $300 million and $2 billion, and that had the highest upside potential (at least 40%). The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician performing quality checks on a range of specialty chemicals.
The Chemours Company (NYSE:CC)
Market Capitalization as of April 23: $1.78 billion
Number of Hedge Fund Holders: 40
Average Upside Potential as of April 23: 59.53%
The Chemours Company (NYSE:CC) provides performance chemicals internationally. It operates through three segments: Thermal & Specialized Solutions, Titanium Technologies, and Advanced Performance Materials. It sells its products through direct and indirect channels, as well as through a network of resellers, third-party sales agents, and distributors.
The company’s Thermal & Specialized Solutions (TSS) segment produces and sells refrigerants. The Opteon Refrigerants are a key product line in this segment and 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 a 3% improvement 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’ anticipated double-digit Opteon growth in 2025. However, BMO Capital analyst John McNulty recently reduced his price target for The Chemours Company (NYSE:CC) from $34 to $27 while maintaining an Outperform rating due to the company’s weaker-than-expected Q4 earnings and outlook. The analyst thinks that the company may experience a slow start in Q1 2025.
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)
Overall, CC ranks 8th on our list of the most promising small-cap stocks according to analysts. While we acknowledge the growth potential of CC, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
