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Quaker Chemical Corporation (KWR): Among the Oversold Global Stocks to Buy According to Hedge Funds
We recently published a list of 11 Oversold Global Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Quaker Chemical Corporation (NYSE:KWR) stands against other oversold global stocks to buy according to hedge funds.
Global stocks are businesses that have a diversified revenue base and do not rely entirely on one particular region or country. Their advantage is the ability to mitigate idiosyncratic risk, which arises from a specific country. Imagine a hypothetical scenario in which the US enters an economic recession that erodes consumer purchasing power, slows down industrial and manufacturing activity. The revenue growth and earnings of a US-based company will tank instantly, while a global stock will be able to compensate for the decline in the US business with growth in emerging or other developed markets. It therefore becomes obvious that global stocks are particularly attractive during times of heightened uncertainty when investors seek flight into safer assets.
The calendar 2025 perfectly fits the description of a market that would favor global stocks. The situation becomes even more attractive as many of the safer global stocks became oversold due to the recent tariff turmoil, making them potentially more attractive from a valuation standpoint. At the same time, Yardeni Research data showed that the net earnings revision index has been in only mild negative territory in the last 2 quarters. What this means is that leading analysts have still not completely bought into the possibility that the US stock market will enter a recession in 2025. Let’s dive deeper into economic indicators and see whether analysts are wrong, and the US market is indeed at the brink of a recession, which would favor global stocks if compared to the rest of the market.
First, we want to briefly touch on the tariff dilemma and emphasize that their danger is real and will likely have a significant negative impact on GDP growth and private spending. Our thesis is reinforced by the reputable J.P. Morgan bank – here’s an excerpt from their recent publication:
“Facts continue to change — there is indication that the “detox period” may be over and the latest messaging from the Trump Administration seems to be shifting from tariffs to tax cuts and deregulation. However, the damage to the business cycle still remains unclear.
While tariff rates are expected to come down from current extreme levels, they are unlikely to be fully removed (China has been benefiting significantly from transshipment substitution). These are encouraging developments, but clarity and closure are still needed to solidify a more positive outlook and avoid further damage to the business cycle.”
Second, recent batches of economic indicators are highly disappointing. After negative data from the Philadelphia Fed, the more recent Dallas Fed data shows that general business activity, new orders, employment, and outlook are all contracting. With such sharp deterioration in economic activity in large states, odds are that Q1 2025 GDP data will mark the first of two required quarters of negative growth to declare a recession. The slowing economy is indirectly confirmed by leading executives of shipping companies, such as America’s supply chain management company’s CEO claimed that in the three weeks since the tariffs took effect, ocean-container bookings from China to the US are down by more than 60 percent. Some economists warn that the consequences could be empty shelves in US stores, similar to the onset of the COVID pandemic, when markets tanked by more than 30%.
Third, the consequences of lower shipments from China could be devastating for the US economy, given that hundreds of billions worth of goods flow through each year. The transportation sector already feels the consequences as one significant player lost a quarter of its value after reporting declining shipping volumes during its most recent earnings call. A prominent American capital market company recently reported that airfreight volumes from China have also stopped, as higher value-added products are seeing less importation. And the list goes on and on – countless industries are likely to be impacted by shortages of key supplies, or input prices that are too expensive to sustain production.
We do not intend to make apocalyptic predictions for the US economy, and especially for the stock market. History shows that regardless of how deep a recession is, prices always recover quite quickly and reach new highs. The key takeaway for readers is that many economic indicators and indirect signals suggest that the US economy is in trouble, and the outlook is uncertain. In this case, a smart move would be to diversify away some of the US exposure by investing in oversold global stocks that have the potential to better hold their value during a potential bear market.
Quaker Chemical Corporation (KWR): Among the Oversold Global Stocks to Buy According to Hedge Funds
A close up view of a specialized chemical compound in the lab.
Our Methodology
To compile our list of oversold global stocks, we used a screener to identify stocks with a Relative Strength Index (RSI) below 40. Then we manually identify the companies that drive at least 40% of their revenue from outside the US. Finally, we compared the list with Insider Monkey’s proprietary database of hedge funds’ ownership as of the fourth quarter of 2024 and included in the article the top 11 stocks with the largest number of hedge funds that own the stock, ranked in ascending order.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Quaker Chemical Corporation (NYSE:KWR) is a global provider of industrial products for heavy manufacturing sectors. Its product portfolio is diverse and centered around metal removal fluids, corrosion inhibitors, forming and forging fluids, hydraulic fluids, rolling lubricants, etc. KWR serves industries such as steel, aluminum, automotive, aerospace, mining, and metalworking.
Quaker Chemical Corporation (NYSE:KWR) faced challenging market conditions in 2024, with softness across end markets and regions, but still delivered solid performance through portfolio strength and focus on improving customer operations and productivity. The company generated $444 million in Q4 net sales, down 5% YoY, and $311 million in adjusted EBITDA for the full year 2024. Despite market headwinds, KWR maintained stable volumes through market share gains and new business wins, outperforming aggregate end markets, which declined in the low to mid-single digits. The company also generated a strong operating cash flow of $205 million in 2024, enabling the execution of capital allocation priorities, including organic growth investments, dividend increases, debt reduction, acquisitions, and share repurchases.
Looking ahead to 2025, Quaker Chemical Corporation (NYSE:KWR) expects modest 1-2% growth in end markets, weighted towards the second half of the year. The company anticipates delivering revenue, adjusted EBITDA, and earnings growth in 2025, along with another strong year of cash flow generation. Management is focused on three key priorities: returning to growth, reducing complexity to unlock leverage in the business model, and disciplined capital deployment to enhance shareholder value. This includes globalizing operations, aligning resources with faster-growing regions, simplifying the organization, and refocusing on customer intimacy to drive organic growth and market share gains. All in all, KWR’s ability to gain market share positions it well for a potential recovery in industrial activity after the current economic slowdown is navigated, which makes it one of the oversold stocks to consider right now.
Overall, KWR ranks 11th on our list of oversold global stocks to buy according to hedge funds. While we acknowledge the potential of KWR as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than KWR but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
