When something is included in so many facets of life, it generally makes an easy investment. Chemical companies are no different. They provide products that keep the world moving. Whether the issue is the fertilization of crops, water treatment, herbicides, textiles, paint, powder coatings or chemical relating to safety and protection, chemical companies are the life blood of modern industry. As such, growth tends to be population driven or development driven, and, given the nature of the chemicals industry, barriers to entry are high so companies that thrive in this sector generally tend to be well-established. To get an idea which ones make the best investments, we took a look at the chemical companies that hedge fund managers like.
1. DuPont de Nemours (DD): DD is popular with several big name fund managers. Bridgewater Associates’ Ray Dalio had 412,600 shares in DD at the end of the third quarter while First Eagle Investment’s Jean-Marie Eveillard held over 826,000 shares in the company at the end of September. Ken Fisher’s Fisher Asset Management, David Dreman’s Dreman Value Management and Ken Heebner’s Capital Growth Management also had significant positions in DD at the end of the third quarter. Of the 300+ hedge funds we track, 33 had positions in DD at the end of the third quarter, up from 32 at the end of the second quarter.
2. FMC Corp (FMC): FMC is also at the top of several hedge fund managers’ lists, including Bridgewater Associates’ Ray Dalio and Third Point’s Dan Loeb. Of the 300+ hedge funds we track, 17 had positions in FMC at the end of the third quarter, up from 16 at the end of the second quarter. However, the total value of the hedge fund investments in FMC shifted from $217.75M to $131.09M.
3. Mosaic Company (MOS): MOS is popular amongst hedge funds as well. David Tepper’s Appaloosa Management, Daniel Loeb’s Third Point, John Paulson’s Paulson & Co, Ken Fisher’s Fisher Asset Management and George Soros’s Soros Fund Management each held significant positions in the company at the end of the third quarter and they weren’t the only ones. Of the 300+ hedge funds we track, 38 had positions in MOS at the end of the third quarter.
4. Dow Chemical Co (DOW): Ray Dalio’s Bridgewater Associates was one of the 15 hedge funds we track that had a stake in DOW at the end of the third quarter. Hedge fund interest in the company has waned some since the second quarter – 25 hedge fund managers held positions in the company at the end of June. Total holdings fell from $387.99M to $137.21M.
5. Ecolab Inc (ECL): Jean-Marie Eveillard’s First Eagle Investment is a fan of ECL. The fund had 50,000 shares in the company at the end of the third quarter. Tom Gayner’s Markel Gayner Asset Management is also numbered among the 19 hedge funds we track that had positions in ECL at the end of the third quarter. Interest in the stock was up in the third quarter compared to the second, when just 13 of the funds we track had positions in ECL.
6. Praxair Inc (PX): Jean-Marie Eveillard’s First Eagle Investment is also a fan of PX. Hedge fund interest in the company declined slightly in the third quarter. Just 15 of the hedge funds we track had stakes in PX at the end of September, compared with 16 at the end of June. However, the hedge funds that are invested in PX became more bullish on the stock during the third quarter. Collectively, they had $659.54M in the company, compared to $638.44M in the second quarter.
7. Air Products & Chemicals (APD): Tom Gayner’s Markel Gayner Asset Management is one of 19 funds to hold a position in APD as of the end of the third quarter, down from 26 at the end of June. Total investment amongst hedge funds also declined from $555.48M to $251.99M.
8. Eastman Chemical Co (EMN): Joel Greenblatt’s Gotham Asset Management, Ken Fisher’s Fisher Asset Management, Jean-Marie Eveillard’s First Eagle Investment and Ray Dalio’s Bridgewater Associates were numbered amongst the 23 hedge funds that owned positions in EMN at the end of the third quarter, down from 26 at the end of June. Total investment amongst hedge funds also declined from $562.47M to $263.05M.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.