Eastman Chemical Company (EMN): 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 Eastman Chemical Company (NYSE:EMN) 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.

READ ALSO: 11 Oversold Tech Stocks to Buy According to Hedge Funds

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.

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).

Eastman Chemical Company (NYSE:EMN)

RSI: 38.34

Number of Hedge Fund Holders: 37

​​Eastman Chemical Company (NYSE:EMN) is a global specialty materials company producing a wide array of products, including specialty plastics, coatings, adhesives, and cellulose-based fibers, serving industries such as transportation, construction, consumer goods, agriculture, and healthcare. EMN has a significant global footprint, with manufacturing facilities and joint ventures in over 10 countries, supplying products to customers worldwide.

Eastman Chemical Company (NYSE:EMN) faced challenges in Q1 2025 due to trade tensions and tariffs, particularly between the US and China. The company revised its Renew revenue guidance from $75-100 million to $50-75 million due to uncertainties in consumer durable markets. Despite these challenges, EMN’s methanolysis program at Kingsport is performing well operationally, with high production rates and improved feedstock efficiency. The company is on track to achieve $50 million in EBITDA from manufacturing cost improvements.

Eastman Chemical Company (NYSE:EMN) is taking several mitigating actions to address the current market uncertainties, including optimizing capital expenditures and focusing on cash generation. The company reduced its capital expenditure guidance from $750 million to $550 million, with the Longview, Texas project being a significant part of this reduction. EMN remains confident in its strategy and ability to navigate through potential downside scenarios, which secures its place on our list of most oversold stocks to buy. The company’s diversified portfolio, vertical integration, and focus on innovation are expected by management to help offset some of the challenges faced in the current economic environment.

Overall, EMN ranks 8th on our list of oversold global stocks to buy according to hedge funds. While we acknowledge the potential of EMN 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 EMN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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