This Chemicals Stock Is Down 32% but Just Became a Top 5 Holding After One Fund's $13 Million Bet
Key Points
New York City-based Alta Fundamental Advisers initiated a new position in Chemours Company during the third quarter.
The fund reported 800,000 shares acquired with a net position change estimated at $12.67 million.
CC is now the fund’s fifth-largest holding, accounting for 6.2% of reported AUM.
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New York City-based Alta Fundamental Advisers initiated a new position in The Chemours Company (NYSE:CC), acquiring 800,000 shares valued at an estimated $12.67 million, according to a November 13 SEC filing.
What Happened
Alta Fundamental Advisers disclosed in a November 13 SEC filing that it established a new position in The Chemours Company during the third quarter. The fund reported owning 800,000 shares with a quarter-end value of $12.67 million. This marks the fund’s fifth-largest position out of 20 total holdings at quarter-end.
What Else to Know
The new stake in CC makes up 5.41% of Alta Fundamental Advisers LLC’s reported U.S. equity assets under management.
Top holdings after the filing:
- NYSE:GCI: $46.1 million (22.4% of AUM)
- NASDAQ:LILAK: $15.6 million (7.6% of AUM)
- NYSE:BTU: $14.9 million (7.2% of AUM)
- NYSE:ACHR: $12.8 million (6.2% of AUM)
- NYSE:CC: $12.7 million (6.2% of AUM)
As of Monday, shares of The Chemours Company were priced at $12.02, down 32% over the past year and well underperforming the S&P 500's 16% gain in the same period.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $5.84 billion |
| Net income (TTM) | ($320.00 million) |
| Dividend yield | 3% |
| Price (as of Monday) | $12.02 |
Company Snapshot
- The Chemours Company produces titanium dioxide pigments, refrigerants, specialty chemicals, and advanced materials for industries such as coatings, packaging, electronics, energy, and automotive.
- The company operates a diversified chemicals business model, generating revenue through the manufacture and sale of performance chemicals and materials to industrial and commercial customers worldwide.
- It serves a global customer base across North America, Asia Pacific, EMEA, and Latin America, targeting sectors including coatings, plastics, electronics, transportation, and industrial manufacturing.
The Chemours Company is a leading global provider of performance chemicals, with a broad portfolio spanning titanium technologies, thermal and specialized solutions, advanced performance materials, and chemical solutions. The company leverages its scale and technical expertise to supply essential materials that enable a wide range of industrial and consumer applications. Chemours' strong market presence and diversified end-market exposure support its competitive positioning within the specialty chemicals sector.
Foolish Take
What matters for long-term investors is not that this position was initiated, but how large it is relative to everything else. At more than 5% of reported assets and immediately ranking among the fund’s top five holdings, this is a statement position, not a speculative add. That matters because this portfolio is otherwise concentrated in deeply cyclical and out-of-favor names, suggesting a willingness to lean into discomfort rather than chase momentum.
The fundamentals help explain the calculus. In the third quarter, The Chemours Company generated $1.5 billion in revenue, flat year over year, but swung to a net income of $60 million from a $32 million loss a year earlier. Adjusted EBITDA came in at $195 million, and free cash flow reached $105 million, a 54% conversion rate. Strength in Thermal and Specialized Solutions, where Opteon refrigerant sales jumped 80%, helped offset weakness in titanium dioxide and advanced materials. Ultimately, this is not a clean story, but it is a cash-generating one with identifiable levers.
Glossary
13F: A quarterly report filed by institutional investment managers disclosing their equity holdings to the U.S. Securities and Exchange Commission (SEC).
Assets under management (AUM): The total market value of assets that an investment firm manages on behalf of clients.
Dividend yield: Annual dividends paid by a company divided by its share price, shown as a percentage.
Forward P/E: Price-to-earnings ratio using forecasted earnings for the next 12 months.
Trailing EV/EBITDA: Enterprise value divided by earnings before interest, taxes, depreciation, and amortization over the past 12 months.
Position: The amount of a particular security or asset held by an investor or fund.
Stake: The ownership interest or share an investor holds in a company.
Quarter-end: The last day of a fiscal quarter, used as a reference point for financial reporting.
Performance chemicals: Specialized chemical products designed for specific industrial or commercial applications.
End-market: The final industry or sector where a product or service is ultimately used.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends USA Today. The Motley Fool has a disclosure policy.
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