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Is It Too Late To Consider Buying Kronos Worldwide, Inc. (NYSE:KRO)?

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·3 min read
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Kronos Worldwide, Inc. (NYSE:KRO), which is in the chemicals business, and is based in United States, saw a significant share price rise of over 20% in the past couple of months on the NYSE. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on Kronos Worldwide’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Kronos Worldwide

What's the opportunity in Kronos Worldwide?

Great news for investors – Kronos Worldwide is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $13.46, but it is currently trading at US$8.66 on the share market, meaning that there is still an opportunity to buy now. 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?

NYSE:KRO Past and Future Earnings May 8th 2020
NYSE:KRO Past and Future Earnings May 8th 2020

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. However, with a relatively muted revenue growth of 1.4% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Kronos Worldwide, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since KRO is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on KRO for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy KRO. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.