Element Solutions Inc (NYSE:ESI) is included in Mad Money’s latest recap as Jim Cramer outlined his strategy for market sell-offs. Cramer expects the stock to “keep on soaring” if the rest of the year “plays out like the first quarter.” He stated:
Now, from a high-level perspective, when you look at the numbers, Element Solutions hasn’t done that great over the last five years. The numbers have been relatively stagnant over the period. But if you zoom in on the last year’s results in particular, even though the overall numbers aren’t particularly inspiring, 4% sales growth, 3% earnings growth, we start to see a better story forming… I’ve also gotta point out this Element Solutions is cheaper, trading at less than 19 times this year’s earnings estimates versus 28 times for Qnity.
… Look, it’s not just that this market has fallen in love with chemical companies thanks to the Iran war shortage; Element Solutions has been putting up better and better numbers. The company’s expected to put up nearly 20% revenue growth this year, 17% earnings growth followed by another fairly strong performance in 2027…
Listen, I think it’s a good story. Like I said, I wouldn’t swap out of my tried and true Qnity shares to own the smaller Element Solutions, but some investors might be inclined to own the latter, especially since it’s a lot cheaper. If you don’t own either, Element’s a fine way to play this corner of the chemical space that’s really doing quite well right now… If we see the war in Iran come to a conclusion, some of the global shortages for chemicals ease then Element’s going to sell off. If the semiconductor boom is impaired for whatever reason as what the stock seem to be saying right, then it would hurt, too. But the bottom line for me: For now, I think Alex in Oregon has brought us a real good one. If the rest of the year plays out like the first quarter, then I expect Element Solutions to keep on soaring.
Photo by Yiorgos Ntrahas on Unsplash
Element Solutions Inc (NYSE:ESI) is a specialty chemicals technology company that provides assembly, circuitry, and semiconductor solutions.
While we acknowledge the risk and potential of ESI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ESI and that has 10,000% upside potential, check out our report about this cheapest AI stock.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years
Disclosure: None. Follow Insider Monkey on Google News.
Hedge Fund Resource Center