In a recent strategic allocation, Absolute Gestao de Investimentos, an investment firm headquartered in São Paulo, has established a prominent position in Chart Industries (NYSE: GTLS), purchasing 440,746 shares during the third quarter. The disclosed stake is valued at roughly $88.22 million as of September 30, according to Securities and Exchange Commission filings dated November 13.
This acquisition marks a notable development within Absolute Gestao's portfolio, as the Chart Industries shares now comprise approximately 11.47% of the fund’s 13F reportable assets under management (AUM) in U.S. equities. The fund’s total reported equity holdings number 35 positions, amounting to $769.14 million.
Following this adjustment, Chart Industries ranks as the third-largest holding within Absolute Gestao’s U.S. stock allocation, closely trailing investments in the Nasdaq-listed cybersecurity firm CyberArk (CYBR) at $92.23 million (12.19% of AUM) and the emerging markets ETF EEM at $89.72 million (11.85% of AUM). Other notable portfolio components include the Brazilian ETF EWZ and the emerging markets EMXC fund, valued at $48.85 million and $48.27 million respectively.
Chart Industries' share price stood at $205.85 at the close of the latest trading period, reflecting a modest appreciation of 5% over the previous year. This performance trails the S&P 500 Index, which recorded a 15% increase in the same timeframe.
Chart Industries Profile
Chart Industries specializes in the engineering and manufacturing of equipment designed for the energy and industrial gas markets. Its product portfolio includes cryogenic storage systems, heat exchange devices, regasification units, and specialized apparatus catering to hydrogen, liquefied natural gas (LNG), biogas, and carbon dioxide capture industries.
The company’s revenue streams derive from multiple sources, including the sale of capital equipment, proprietary process technologies, aftermarket service offerings, and leasing of equipment. Its diverse customer base encompasses industrial gas producers, energy companies, and niche sectors such as aerospace, food and beverage processing, and water treatment facilities on a worldwide scale.
Chart Industries leverages in-depth expertise in cryogenics and heat transfer to develop infrastructure solutions critical for energy transition initiatives and boosting industrial efficiency. Through an extensive global service network and its broad product suite, Chart positions itself as a vital partner for customers operating within fast-evolving energy and industrial markets.
Investment Context and Operational Highlights
The recent investment move by Absolute Gestao is particularly compelling given the concentration of capital—allocating more than one-tenth of U.S. equity holdings to a single industrial company demonstrates strong conviction grounded in fundamental assessment rather than short-term trading momentum.
Moreover, Chart Industries currently faces a proposed acquisition offer from Baker Hughes, priced at $210 per share. While the timeline regarding whether Absolute Gestao's purchase predates or follows the acquisition announcement remains unspecified, the bid introduces a potential upside if the transaction concludes as anticipated in the upcoming year.
Financially, Chart Industries is navigating one of its most robust operational periods. During the third quarter, its incoming orders surged by nearly 44% year-over-year, reaching record levels of $1.68 billion. This inflow has pushed the company’s total backlog beyond $6 billion. Key demand drivers include LNG infrastructure, data center cooling systems, hydrogen-related products, carbon capture technologies, and services for industrial gas clients, with many customers committing capital investments years ahead.
Despite GAAP net losses attributed to one-time merger integration and termination expenses, Chart’s adjusted operating margins advanced to roughly 23%. This highlights substantial underlying profitability and operational strength that may remain obscured within accounting noise.
Strategic Fit Within the Portfolio
Chart Industries’ designation within the Absolute Gestao portfolio aligns well with the fund’s broader investment themes emphasizing global economic expansion and emerging market dynamics. Its equipment offerings simultaneously address critical facets of energy security, electrification efforts, and decarbonization strategies, integrating seamlessly alongside other significant fund holdings like broad emerging market exchange-traded funds and cybersecurity technology assets.
The infusion of approximately $88 million into this industrial equipment manufacturer reflects a deliberate positioning that melds sustainable energy infrastructure trends with growth-oriented investment principles, showcasing a nuanced approach to capital allocation within global macroeconomic frameworks.
Company Metrics at a Glance as of Last Reporting
| Metric | Value |
|---|---|
| Share Price (most recent Friday) | $205.85 |
| Market Capitalization | $9.25 billion |
| Revenue (Trailing Twelve Months) | $4.29 billion |
| Net Income (Trailing Twelve Months) | $66.70 million |
Key Considerations
- Conviction Investment: Allocating more than 11% of U.S. equity exposure to a single industrial equity reveals strong fundamental conviction beyond mere price momentum.
- Pending Acquisition: The offer from Baker Hughes at $210 per share potentially adds an upside buffer, depending on the timing of the fund’s purchase relative to the bid.
- Robust Demand and Earnings Power: Record-breaking order volumes and a substantial backlog underscore positive demand trends with adjusted operating margins near 23% despite accounting for one-off expenses.
Risks and Areas of Uncertainty
- Acquisition Outcome: The future of Baker Hughes’ takeover offer remains uncertain, and any delay or failure could impact share value and investment returns.
- GAAP Losses: Recent reported losses connected to merger and termination costs may obscure near-term profitability, potentially confusing investors assessing financial performance.
- Dependent on Industrial and Energy Markets: Chart Industries’ business is heavily tied to energy transition markets and industrial capital spending, which may fluctuate with broader economic conditions or regulatory changes.