HUN

Huntsman ($HUN) Chairman Makes Third Major Share Purchase This Year Amid Stock Plunge - Insider Signal of Undervaluation?

05/07/2025 20:09

As chemical materials company $HUN (Huntsman) has seen its stock price plummet in recent months, Chairman Peter Huntsman has stepped in with a significant purchase of company shares totaling approximately $493,000 on May 5th. According to SEC filings, Huntsman acquired 42,000 shares at an average price of $11.74 per share. This purchase came immediately after the company's first-quarter earnings release triggered further stock declines, marking the chairman's third major share acquisition this year. Earlier in March, Huntsman also bought 30,000 shares over two consecutive days for approximately $483,000. Huntsman Corporation is a global manufacturer of diversified chemical products, operating through three primary segments: Polyurethanes, Performance Products, and Advanced Materials. The company serves various industries including aerospace, automotive, construction, and consumer products. However, the company has been struggling amid economic slowdowns, weakness in the Chinese market, and tariff-related challenges. The company's Q1 2025 results, released on May 1st, fell short of market expectations. Revenue decreased by 4.1% year-over-year to $1.41 billion, below analyst forecasts of $1.49 billion. Adjusted quarterly loss per share was $0.11, matching expectations but deteriorating from the $0.06 loss reported in the same quarter last year. However, net loss improved to $5 million from $37 million in the year-ago period. Huntsman's stock has declined approximately 37% year-to-date, falling from around $17 at the beginning of the year to below $11 recently. The decline accelerated in early April, with additional pressure following Bank of America's downgrade to 'neutral' on April 15th, when they also reduced their price target from $22 to $15. The chairman's consecutive large purchases are particularly noteworthy in this context. Peter Huntsman, a member of the founding family, brings deep knowledge and a long-term vision for the company. His recent purchases have increased his direct ownership stake, which can be interpreted as a strong signal of confidence in the company's long-term value despite current challenges. Examining insider trading patterns reveals that the chairman's purchases align with periods of significant stock price declines. In contrast, Director Mary Beckerle sold shares worth approximately $433,000 at $21.42 per share in November 2024, when the stock was trading at relatively higher levels. Huntsman currently faces financial challenges, including a high debt ratio of approximately 58.7% and continued losses. Specifically, tariff issues affecting business in Asia and China have negatively impacted performance, a key factor in BofA's downgrade decision. Nevertheless, Huntsman's current stock price is approaching historic lows and offers a substantial dividend yield of approximately 8.8%. The company's diversified product portfolio and global market presence suggest potential for recovery over the longer term. Investors should monitor Huntsman's cost-cutting efforts, operational efficiency improvement plans, and the potential for cyclical recovery in the global chemicals industry. The next quarterly earnings report, expected in early August, will provide crucial indicators regarding the company's financial health and growth prospects. Ultimately, the chairman's substantial share purchases suggest a significant disconnect between insiders' perception of company value and current market valuation. However, given the ongoing financial challenges and uncertain global economic environment, investors should anticipate high volatility in the near term and approach with caution.

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