Value Fund Dumps $10.1 Million Eastman Chemical Stake as Stock Slump Continues and EBIT Drops 43%

New York City-based Atlantic Investment Management fully exited its position in Eastman Chemical Company (NYSE:EMN) in the third quarter, reducing holdings by 134,710 shares and approximately $10.1 million, according to its November 14 SEC filing.

What Happened

According to its SEC filing dated November 14, New York City-based Atlantic Investment Management completely sold out of its position in Eastman Chemical Company (NYSE:EMN) during the third quarter. The firm disposed of 134,710 shares, eliminating a previously substantial holding worth $10.1 million based on quarterly average pricing.

What Else to Know

Top holdings after the filing:

• NYSE:GTLS: $29.5 million (17% of AUM)
• NYSE:APTV: $26.3 million (15.1% of AUM)
• NASDAQ:WFRD: $24.7 million (14.2% of AUM)
• NYSE:AXTA: $21.9 million (12.6% of AUM)
• NYSE:OSK: $19.3 million (11.1% of AUM)

As of Thursday, shares of Eastman Chemical Company were priced at $60.51, down 41% over the past year and well underperforming the S&P 500, which is up 13% in the same period.

Company Overview

Company Snapshot

• Eastman Chemical Company offers specialty materials, additives, functional products, advanced polymers, chemical intermediates, and fibers across diverse end markets including transportation, construction, electronics, agriculture, and consumer goods.
• The company generates revenue through the manufacture and sale of high-value specialty chemicals and materials, leveraging innovation and scale to serve industrial and consumer applications globally.
• It serves a broad customer base spanning manufacturers, industrial processors, OEMs, and downstream product companies in multiple sectors worldwide.

Eastman Chemical Company is a leading specialty materials producer with a global footprint and a diversified product portfolio. The company focuses on innovation in specialty chemicals, targeting high-growth markets such as transportation, building and construction, and advanced electronics. Its scale, integrated operations, and broad customer reach provide a competitive edge in delivering tailored solutions to complex industrial and consumer needs.

Foolish Take

Eastman’s latest results underscore why Atlantic's patience may have been tested: Demand across discretionary end markets remains soft, inventories are still being unwound, and earnings remain well below prior-cycle levels. Even so, the company is generating strong cash flow and tightening its cost structure, which could matter if conditions stabilize.

Atlantic Investment Management fully exited its Eastman Chemical position during the third quarter, selling roughly 135,000 shares and unwinding what had been a meaningful stake. The decision came as Eastman reported an 11% revenue decline to $2.2 billion and a steep drop in EBIT to $188 million from $329 million a year earlier, pressured by lower volume across all segments and reduced asset utilization. Still, operating cash flow held up at $402 million, supported by aggressive working-capital reductions and $200 million of inventory drawdowns. The company also returned $146 million to shareholders through dividends and buybacks.

For long-term investors, the key question is whether Eastman’s disciplined cash generation and ongoing cost actions can bridge the weak macro backdrop. The underlying portfolio remains diversified, but with the stock down more than 40% in the past year—and more than 50% over several years—this exit signals that at least one value investor sees better opportunities elsewhere.

Glossary

Assets Under Management (AUM): The total market value of investments managed by a fund or investment firm.
13F: A quarterly report filed by institutional investment managers to disclose their equity holdings to the SEC.
Position: The amount of a particular security or asset held in a portfolio by an investor or fund.
Dividend Yield: A financial ratio showing how much a company pays in dividends each year relative to its share price.
Stake: The ownership interest or share held in a company or asset by an investor or fund.
Quarterly Average Pricing: The average price of a security over a specific quarter, used to estimate transaction values.
OEM (Original Equipment Manufacturer): A company that produces parts or equipment used in another company's end products.
Downstream: Refers to companies or activities closer to the end consumer in the supply chain, such as product manufacturers or retailers.
Specialty Materials: High-value, engineered materials designed for specific industrial or consumer applications.
Integrated Operations: Business activities where multiple stages of production or supply are managed within the same company.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Aptiv and Chart Industries. The Motley Fool has a disclosure policy.