Have Investors Already Priced In Kronos Worldwide Inc’s (NYSE:KRO) Growth?
Kronos Worldwide Inc (NYSE:KRO), a chemicals company based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a USD $3.24B market cap stock, it seems odd Kronos Worldwide is not more well-covered by analysts. Although, there is more of an opportunity for mispricing in stocks with low coverage, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Kronos Worldwide’s outlook and value based on the most recent financial data to see if the opportunity still exists. View our latest analysis for Kronos Worldwide
Is Kronos Worldwide still cheap?
Good news, investors! Kronos Worldwide is still a bargain right now. I’ve used the price-to-equity ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 9.81x is currently well-below the industry average of 21.06x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Kronos Worldwide’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Kronos Worldwide?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Kronos Worldwide, it is expected to deliver a relatively unexciting top-line growth of 9.78% over the next year, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since Kronos Worldwide is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on Kronos Worldwide for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy Kronos Worldwide. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Kronos Worldwide. You can find everything you need to know about Kronos Worldwide in the latest infographic research report. If you are no longer interested in Kronos Worldwide, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
