I deliver commentary about Barchart’s Top and Bottom 100 Stocks to Buy every Tuesday. In recent weeks, finding attractive value plays from the bottom 100 has become increasingly challenging. 

In Monday’s trading, five out of the bottom 100 had trailing 12-month earnings per share, while only three had a positive P/E ratio. 

The only one among the bottom 100 that had both is Aspen Aerogels (ASPN), a manufacturer of aerogel materials for infrastructure and energy facilities. 

Full disclosure: I know very little about Aspen’s business, but I’m tired of writing about the top 100 stocks, so I thought giving a bottom 100 stock a shot made sense. 

While there is no question that its products are vital to the safe and successful operation of these facilities, the company’s stock is down 73% over the past three years and is trading within pennies of penny-stock status.  

Less than four years ago, it traded a penny shy of $66 in November 2021, so the upside is tantalizingly appealing. 

I’m not saying it will get within a sniff of $66 in the next 12-24 months. However, here’s why it could. 

Big Backing From the Billionaire Koch Family

To understand why its shares have cratered since November 2021, one must first know how it reached its all-time high 41 months ago. 

One piece of news that likely had a positive effect on its share price back in 2021 was the purchase of $75 million of the company’s stock in June 2021 by Koch Strategic Platforms (KSP), the environmental investment arm of Koch Investments Group, an investment vehicle of Koch Industries and the billionaire Koch family.

“We are investing in disruptive companies that operate in industries with significant tailwinds. Aspen's aerogel technology platform is rich with potential and provides an opportunity to impact positively the transition of the energy value chain now and in the future,” stated KSP President David Park in Aspen’s June 29, 2021, press release announcing the investment.  

From June 29, 2021, through Nov. 22, 2021, its shares gained 174%, an annualized return of 419%. Koch paid $21.66 each for their 3.46 million shares. 

As of Aug. 3, 2021, Aspen had 32.94 million shares and a market cap of $1.25 billion, so while the investment was considerable, it accounted for less than 11% of its outstanding shares. 

However, by April 5, 2022, Koch held 8.12 million shares, acquired at a total cost of $225 million, making it the largest shareholder with 20.9% of Aspen’s stock. 

A year later, Koch held 19.22 million shares, and 26.2% of the company. That purchase in November 2022 lowered the Koch’s average cost to $16.91 from $27.71. Earlier in 2022, Koch Disruptive Technologies, another Koch affiliate, bought $100 million of Convertible Senior PIK Toggle Notes due in 2027.  

So, Koch had sunk $475 million into Aspen by November 2022. Its current market cap is only $32 million higher than that. 

Between November 2022 and March 10, 2025, Koch sold off approximately 7.5 million shares, most likely sold in 2024 when share prices hit $33.15, its 52-week high. 

Koch affiliates remain its largest shareholder, holding 12.28 million shares, and nearly 15% of its stock. With its remaining shares underwater, you can be sure they’ll wait this out. 

Why the 92% Fall From Its All-Time High?

ASPN stock closed out 2021 at $49.79. A year later, its shares were down to $11.79.

The first shoe to drop was the Jan. 13, 2022, announcement that then CFO John Fairbanks, who had been with the company for 15 years, was retiring.  Fairbanks and CEO Don Young took the company public in June 2014. By the time he’d retired, they’d worked together in the C-suite since 2006. 

However, it’s more likely that investors pushed its stock down because of impending bad news. On Feb. 12, 2022, it reported its Q4 2021 results, which included a 50-cent-a-share loss, 21 cents worse than Wall Street’s estimate. Meanwhile, its revenue in the quarter, while higher year-over-year, missed the consensus estimate by 10%.

Finally, the shares fell from $35 on April 1, 2022, to under $10 by mid-July. Over the next 18 months, it traded in a tight range slightly above or below $10.  

The Koch money certainly helped its share price from falling further despite reporting a 59-cent loss in Q1 2022, more than double the 22-cent loss a year earlier. 

The Optimistic View

Of the 10 analysts that cover its stock, nine (4.80 out of 5) rate it a Buy, with an $18.33 target price, more than threefold higher than its current share price. 

In the past four quarters, Aspen’s reported earnings have surprised by 108%, 320%, 210%, and in Q4 2024, it beat the estimate by a more moderate 67%. 

While analysts expect 2025 to see some backsliding from earnings--the estimate is $0.19, down from $0.47 in 2024. However, the estimate for 2025 is $0.59, up 12 cents from 2024. It trades at 9.3x this estimate. 

Based on 82 million shares outstanding, it has $2.69 a share in cash. If you back that out from its share price, it trades at 4.8x its 2026 EPS estimate [$5.50 share price - $2.69 / $0.59 EPS]. 

I wouldn’t bet your kid’s education fund on Aspen, but its shares appear to be beaten down, providing an acceptable risk/reward proposition. 

Maybe consider a call option that’s long-term and out of the money, such as the Jan. 15/2027 $10 strike, with a $1.60 ask price, and 16% of its strike price. While the profit probability appears low at 25.48%, you’ve got nearly 21 months to let this play out. 

Regression to the mean suggests the share price is due to turn higher over the next year-and-three-quarters.