2. Dow Chemical Co (NYSE:DOW)
Investors with Long Positions (as of June 30): 65
Aggregate Value of Investors’ Holdings (as of June 30): $5.85 Billion
The second-largest chemicals company in the world in terms of revenue, Dow Chemical Co (NYSE:DOW), was also the second most popular chemical stock among hedge funds at the end of the second quarter. Just like Eastman Chemical Company (NYSE:EMN), the stock of Dow Chemical Co (NYSE:DOW) gained ground during the second quarter (up by 7.5%) and, including a correction during the last two months, it has lost 8% since the beginning of the year. However, Dow Chemical Co (NYSE:DOW) gained a significant level of popularity, as the number of hedge funds with a long position went up by nine and the aggregate value of their holdings increased by a whopping $1.76 billion during the second quarter. Although the company posted a 13% annual decline in sales in its most recent earnings report due to currency headwinds and the slump in oil prices, several analysts appreciated that the company was able to increase its operating EBITDA margins by 396 basis points to 19% on the year. On August 24, securities law firm Faruqi & Faruqi, LLP announced that it is investigating the allegations that the CEO of Dow Chemical Co (NYSE:DOW) misused the company’s funds for personal benefits and charities, and whether other officers and Board members breached their fiduciary duties by not disclosing and reporting those transactions properly. Billionaire activist investor Dan Loeb of Third Point, who obtained two Board seats at Dow Chemical Co (NYSE:DOW) last November, increased his stake in the company by 5% to 23 million shares during the April-June period.
1. Air Products & Chemicals, Inc. (NYSE:APD)
Investors with Long Positions (as of June 30): 76
Aggregate Value of Investors’ Holdings (as of June 30): $8.638 Billion
Even after the number of funds with long positions went down by seven, the aggregate value of their investments dropped by almost $1.3 billion, amid a 9% decline of the stock during the second quarter, Air Products & Chemicals, Inc. (NYSE:APD) turned out to be hedge funds’ favorite stock in the chemical industry for the quarter. Hedge funds’ confidence in the stock is resonated by the fact that on a year-to-date basis, Air Products & Chemicals, Inc. (NYSE:APD)’s stock has fallen the least (by 5.11%) among the other companies in this list. Air Products & Chemicals reported EPS of $1.65 on revenue of $2.47 billion for the third quarter of fiscal year 2015, compared to estimates of EPS of $1.58 on revenue of $2.51 billion. On August 4, Global Hunter Securities upgraded the stock to ‘Accumulate’ from ‘Neutral’ and raised its price target to $165 from $152. Last year’s best performing hedge fund manager, Bill Ackman of Pershing Square, who owned over 20.5 million shares of Air Products & Chemicals, Inc. (NYSE:APD) at the end of June, noted in an interim financial statement released recently that he expects the demand for industrial gases manufactured by the company will remain “robust over the long-term.”
Disclosure: None
