CE

Celanese ($CE) CEO & Executives Buy the Dip After 67% Crash - Bottom Signal in Sight?

08/18/2025 20:09

Celanese Corporation's ($CE) management team has been making notable purchases during the company's sharp stock decline, with their latest buying activity on August 14 drawing investor attention. CEO Mark Murray and Director Scott Sutton each purchased approximately $80,000 worth of shares at $40-41 per share, suggesting they view current levels as a bottom. Celanese, headquartered in Irving, Texas, is a global chemical and specialty materials company supplying engineered polymers and acetyl chemicals to automotive, medical device, and industrial sectors. Operating through two main segments - Engineered Materials and Acetyl Chain - the company employs about 11,000 people and maintains a diverse product portfolio from nylon compounds to acetic acid, serving as key raw materials for automotive parts, packaging, and paint coatings. This insider buying is particularly significant given the company's severe challenges. Following November 2024 announcements of a 95% dividend cut and 87% third-quarter net income decline, shares plummeted 40% from $125 to $75. The downward trajectory continued into 2025, with shares hitting $37 in April - a devastating 75% decline from the previous year's $145 levels. However, management has consistently bought shares during these declines. On March 7, five executives simultaneously purchased $640,000 worth of stock at $54-55 levels. Director Scott Sutton led with a $400,000 investment for 7,450 shares, while CEO Mark Murray added $120,000. Murray continued buying in May with another $70,000 purchase, followed by this latest August buying spree. These insider actions reflect strong conviction in the company's fundamentals. Q2 2025 results showed revenue declining 4.5% year-over-year but still beating analyst estimates by 1.4%. Notably, Engineered Materials operating EBITDA reached $326 million, exceeding forecasts by 17%, demonstrating the segment's competitive strength in high-value engineering materials. Risk factors remain substantial. The debt-to-equity ratio of 232% significantly exceeds the industry average of 50-100%, while net losses resulted in a -23.8% ROE. March's removal from the S&P 500 index created selling pressure from passive funds, and the Trump administration's tariff policies are pressuring the broader chemical sector. Valuation metrics, however, appear attractive. The P/E ratio of 7.36x and P/S ratio of 0.47x trade well below industry averages, while the P/B ratio of 0.88x indicates shares trade below book value. With $1.17 billion in cash and a $1.75 billion credit facility, liquidity concerns appear minimal. The timing and scale of insider purchases deserve investor attention. The $40-55 range where management invested their personal funds likely represents strong support levels. The concentrated buying in March and August appears conviction-based rather than routine purchases. The November 3 Q3 earnings release will be crucial. If the company achieves its $1.10-1.40 per share adjusted earnings guidance, it could signal the worst is over. Additionally, restructuring progress and debt reduction plans under new CEO leadership will be key recovery factors. Long-term growth drivers include increasing demand for engineering materials in electric vehicles, medical devices, and electronics. Current prices fail to reflect this growth potential, creating potential value opportunities. Investors should consider the high volatility and debt risks. If chemical industry recovery delays beyond expectations, further declines remain possible. A dollar-cost averaging strategy around insiders' $40-55 purchase range could effectively manage risk while capitalizing on potential recovery.