Choice Equities Expects Demand Growth in Orion Engineered Carbons S.A. (OEC)’s Products

Choice Equities, a hedge fund manager, released its second quarter investor letter recently. You can view it here. In the second quarter, the fund generated a -17.4% net loss leading to a -34.6% year-to-date performance. Interest rate hikes and market sentiments affected the fund’s performance in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

In the second quarter investor letter, Choice Equities discussed stocks like Orion Engineered Carbons S.A. (NYSE:OEC). Headquartered in Senningerberg, Luxembourg, Orion Engineered Carbons S.A. (NYSE:OEC) is the manufacturer and distributor of carbon black products. On August 26, 2022, Orion Engineered Carbons S.A. (NYSE:OEC) stock closed at $17.19 per share. One-month return of Orion Engineered Carbons S.A. (NYSE:OEC) was -1.66%, and its shares lost 4.76% of their value over the last 52 weeks. Orion Engineered Carbons S.A. (NYSE:OEC) has a market capitalization of $1.045 billion.

Here is what Choice Equities specifically said about Orion Engineered Carbons S.A. (NYSE:OEC):

“Orion Engineered Carbons S.A. (NYSE:OEC) hosted their first ever analyst day in early June. It was an effective presentation. The company highlighted the great progress they have achieved in recent years, upfitting their plant and equipment to meet EPA regulations and how this mandated capex will soon subside. Management also highlighted how well positioned the company is to capitalize on the secular growth drivers associated with growing demands for carbon and rubber black.

With just a few key players, it is an oligopoly-like industry structure where incumbents also enjoy regionalized monopoly-like dynamics due to the cost of transport of carbon black. On the back of growing needs for EV tires and batteries which will drive increasing demand for their products, the company laid out a credible plan that equates to a high teens EBITDA CAGR in coming years. At recent prices, shares trade at 6x PE and 5x EBITDA.”

Photo by Mika Baumeister on Unsplash

Orion Engineered Carbons S.A. (NYSE:OEC) is not on the list of 30 Most Popular Stocks Among Hedge Funds. Orion Engineered Carbons S.A. (NYSE:OEC) was held by 24 hedge fund portfolios at the end of the second quarter compared to 22 in the previous quarter. You can check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other prominent investors.

Disclosure: None. This article is originally published at Insider Monkey.