5. DuPont de Nemours Inc. (NYSE:DD)
Number of Hedge Fund Investors: 58
DuPont de Nemours Inc. (NYSE:DD) is a global science and technology company known for its innovations in materials science, electronics, and specialty products. Jim Cramer highlights DuPont de Nemours Inc. (NYSE:DD) as one of his top picks. DuPont de Nemours Inc. (NYSE:DD) is in the process of splitting into three separate companies, with one of these—classic DuPont—holding Tyvek, a well-known product used in housing construction. Cramer believes this division, which is owned by the Trust, has significant potential for further gains.
“One of my favorites, though, is DuPont, which is splitting into three companies, one of which—classic DuPont—has Tyvek, the obvious housing play. The Trust owns it, and I think it could rally much further, especially if it gets bids for its water division, which is technically for sale.”
DuPont de Nemours Inc. (NYSE:DD)’s recent performance reveals strong growth prospects, driven by strategic actions and improved financial results. In the second quarter, DuPont de Nemours Inc. (NYSE:DD) achieved a 2% increase in net sales, reaching $3.2 billion. This growth was supported by the Spectrum acquisition, despite facing a 2% negative impact from currency fluctuations. DuPont de Nemours Inc. (NYSE:DD)’s emphasis on productivity, operational efficiency, and cost-saving measures from recent restructuring efforts is fueling growth in sales, margins, and cash flow.
Here’s what DuPont de Nemours Inc. (NYSE:DD)’s CFO, Antonella Franzen has to say in their latest earnings call:
Our second quarter results were clearly encouraging. Volume recovery is a key driver of our improved Q2 financial performance. Additionally, our ongoing commitment to drive productivity and operational excellence as well as continued savings from restructuring actions announced last November are also contributing to top line growth, margin expansion and cash flow improvement. Net sales of $3.2 billion increased 2% versus the year ago period, as a favorable portfolio benefit of 4%, reflecting the Spectrum acquisition was partially offset by a 2% currency headwind.
Organic sales were flat as a 2% increase in volume was offset by a 2% decrease in price. Higher volume was driven by broad-based growth in electronics markets within semi and interconnect solutions with year-over-year reported volumes up more than 20% and mid-teens, respectively. These gains were partially offset by year-over-year declines in China within Water Solutions as well as Tyvek Medical packaging. However, we did see sequential improvement in these areas, as Lori mentioned. On a segment view, E&I organic sales inflected to grow 8% while W&P organic sales decline moderated to 6%. Organic sales in corporate decreased 5% versus the year ago period. From a regional perspective, Asia Pacific delivered 3% organic sales growth versus the year ago period with growth driven by China, where organic sales were up 8%, led by strong growth in E&I.
In other regions, the North America was down 2% and Europe was down 7%. Second quarter operating EBITDA of $798 million increased 8% versus the year ago period as volume gains, lower product costs, Savings from restructuring actions and the earnings contribution from Spectrum were partially offset by higher variable compensation. Operating EBITDA margin during the quarter was 25.2%, up 130 basis points versus the year ago period and up 190 basis points sequentially from first quarter. Additionally, I am very pleased with our cash flow performance as we reported another quarter of strong cash generation and conversion. On a continuing operations basis, cash from operations of $527 million, less capital expenditures of $102 million, resulted in adjusted free cash flow of $425 million.” (Click here to see more…)
