Corporate Webpages Kronos Worldwide, Inc.
Kronos Worldwide Inc. (KRO) is a highly-focused almost "one
product" specialty chemical company which makes Titanium Oxide
products used primarily for pigments to color various products
from paints to plastics to clothing. It even has food
applications. The company may be based in Dallas, but it
appears to have a heavy Norwegian influence. Our first reaction
to reviewing it was concern over the absence of a Chairman's
Letter or any sort of annual report to shareholders beyond the
basic SEC requirements. This often indicates a company more
concerned about its products than its shareholders.
The next thing we note is that the company has very strong
fundamentals, as valued by the Zenith Index, and is liked by researchers.
News seems very sparse for this company, and the bulk of the
items that exist concern a steadily incrementing round of price
increases for the company's products worldwide, broken out by
region, i.e. Western and Eastern Europe, Asia, Latin America,
North America, and so on. These small increases are in the
neighborhood of 5 cents per pound but occur quite frequently.
This company seems to have exceptional corporate governance despite
the absense of the Chairman's Letter, and there is considerable
insider buying by both the CEO and Chairman of the Board recently.
You don't see that too often with American companies. Should
one follow insiders into this stock? Chairman Harold Simmons
has been buying the stock feverishly since Nov. 18th, buying
100,000 shares on that day and accumulating more than 450,000
shares since then, with a 10,000 share buy on Dec. 10th. These
are not all stock option perqs. In fact stock option holdings by
insiders, salaries, bonuses and perqs are quite modest in this compoany
by any standard. KRO is trading at 7.5 times
forward P/E, 0.4 X PEG, 5.6 X EV/EBITDA, and has a consistent
2.8% dividend yield. One might compare that to major competitor
Huntsman Chemical (HUN) which is also a potential buy, at 5 times
forward P/E, 0.8 X PEG, 5.5 X EV/EBITDA, and a consistent 4.0%
dividend yield. (We didn't catch Huntsman in time before this review.)
KRO appears to be near the bottom of a range-trade channel.
In fact, this stock appears to be so strong that we should probably be
taking a hard look at all those indicators going against the grain in our
Decision Matrix at the end of this article as suspect in their reliability.
Either they are unreliable or "heros." Most researchers seem to have
been caught completely off guard on their suspect analyses as well.
01-17-2012: Kronos Worldwide, Inc. (KRO): Meaningful Insider Buying
(WAIT FOR PAGE TO LOAD COMPLETELY BEFORE LINKS WORK.)
Company Profile
News
Comparison with Peers
Bond Issue
Zenith Index
Financial Statements
Financial Ratios
Market Grader
Intrinsic Value (Disc. CashFlow)
Intrinsic Value (Proj. Earnings)
Scout Stock Rating
Projected Earnings
Research Reports
Analysts' Opinions
Insider Activity
Institutional Activity
Sentiment
Short Interest
Stock Report
Management's Discussion
Moving Average Chart
Right Time Study
Channel Potential
Intraday Chart
Stock Fetcher
Point & Figure Chart
Wall Street Analyzer
Marketspace Chart
Time Series Forecast
Neural Network Prediction
Stock Options
Ultimate Trading Systems
Recommendation
Corporate Wepages
Company Profile |
News |
Comparison |
Similar Companies Performance:
Bond Issue |
Zenith Index |
Under current market conditions, a Zenith Index Score of 1.20 or above is required for a positive rating on this factor. 1.21 -1.30 is considered acceptable, 1.30-1.40 is consider strong and > 1.40 is considered exceptionally strong. Accounting statements in this section often contain mistakes, especially in earlier years' totals, but data is deemed sufficient for us to give a rating. More accurate financial statements follow in the next section.
Kronos Worldwide Inc. (KRO ) Sector: Basic Materials
5430 LBJ Freeway Industry: Specialty Chemicals
Suite 1700 Exchange: NYSE
Dallas, TX 75240-2697
Kronos Worldwide, Inc. engages in the production and marketing of titanium
dioxide pigments primarily in North America and Europe. The titanium
dioxide pigments are used to impart whiteness, brightness, opacity, and
durability for products, such as coatings, plastics, and papers, as well
as various specialty products, such as inks, food, and cosmetics. The
company produces titanium dioxide pigments in two crystalline forms, such
as rutile and anatase under the Kronos brand name. It also offers
ilmenite, a raw material used directly as a feedstock by sulfate-process
titanium dioxide pigment plants; iron-based chemicals, which are
co-products and processed co-products of the titanium dioxide pigment
production process and used as treatment and conditioning agents for
industrial effluents and municipal wastewater, as well as in the
manufacture of iron pigments, cement, and agricultural products; and
titanium oxychloride and titanyl sulfate, which are side-stream products
from the production of titanium dioxide pigments. The company-Ęs titanium
oxychloride is used in the formulation of pearlescent pigments and
production of electroceramic capacitors for cell phones and other
electronic devices; and titanyl sulfate is used in pearlescent pigments,
natural gas pipe, and other specialty applications. In addition, it
provides technical services. The company serves paint, plastics, and paper
manufacturers. Kronos Worldwide, Inc. sells its products through
distributors and agents for approximately 4,000 customers in approximately
100 countries. The company was founded in 1989 and is headquartered in
Dallas, Texas. Kronos Worldwide, Inc. is a subsidiary of Valhi, Inc.
Last Trade: 22.16 52-Week Range: 34.50 - 14.16
Trade Date: 01-16 Avg. Volume: 773,651 Shares
Index Membership: Employees: 2,440
Corporate Governance:
Audit (Low Concern), Board (Medium Concern),
Compensation (Low Concern), Shareholder Rights (Low Concern).
EPS: 2.38 Dividend Amount: $ 0.60 Yield: 2.80%
Ex-Dividend Date: Dec 7, 201 Mkt Cap: $ 2,520,000K
Payout Ratio: 44.00%
Last Split Factor (new for old): 2:1 Split Date: May 23, 20
Key Statistics:
Enterprise Value: $ 2,760,000K Revenue (ttm) : $ 1,880,000K
Gross Profit: $ 345,300K
Earnings before Income Tax, Depreciation and Amortization: $ 509,700K
Enterprise Value/Revenue (ttm): 1.47 Revenue per Share: $ 16.44
Enterprise Value/EBITDA (ttm): 5.42 Qtrly Rev Growth (y to y): 45.50%
P/E Ratio (fwd projected): 7.14 P/E Ratio (current): 9.13
P/E Growth Ratio (5 yr expected): 0.41 Operating Margin: 24.61%
Price/Sales Ratio: 1.37 Profit Margin: 14.46%
Price/Book Value: 2.89 Book Value: $ 7.67/sh.
Return on Assets: 18.61% Net Income Avl to Common: $ 271,700K
Return on Equity: 41.92% Diluted Earnings/Share: $ 2.38
Qrtly Earnings Growth (yoy): 167.60%
Balance Sheet Items : Cash Flow Items (ttm):
(most recent qrtr) (trailing 12 mo.)
Total Cash: $ 156,600K Operating Cash Flow:$ 301,700K
Total Debt: $ 402,900K Lvgd Free Cash Flow:$ 190,290K
Total Debt/Equity: 45.32
Total Cash/Share: $ 1.35
Current Ratio: 2.85
Share Statistics: Stock Price History:
Shares Outstanding: 115,900K Stk 52-Week Change: -6.24%
Float: 21,030K S&P 500 52-Wk Chng: -0.46%
Sh. Short % of Float: 18.70% 50-Day Moving Avg: 19.19
Short Ratio: 6.30 200-Day Moving Avg: 21.96
% Held by Institutions: 16.10% Beta: 1.88
% Held by Insiders: 81.29%
Analysts' Estimates: Cur. Qtr Next Qtr Cur. Year Next Year
___________________________ Dec 11 Mar 12 Dec 11 Dec 12
Average Earnings Estimate 0.61 0.00 3.04 0.00
Average Revenue Estimate 66M 614M 1,980M 2,420M
Factors Comparing This Company to Its Industry Leader (1.0 = Average):
Long Term EPS Growth Rate (5 yr): 18.500 EPS Growth (Qrtly YoY): 24.667
PEG Ratio (ttm, 5 yr expected): 357.574 P/E Ratio (ttm): 16.202
Revenue Growth (Qrtly YoY): 6.167
Annual Income Statements: All numbers in thousands)
Period Ending Dec31,2010 Dec31,2009 Dec31,2008
Total Revenue 1,449,700 1,142,000 1,316,900
Cost of Revenue 1,104,400 1,011,700 1,096,300
Gross Profit 345,300 130,300 220,600
Operating Expenses: Research & Development 0 0 0
Selling, General & Administrative 166,900 146,000 174,000
Non-Recurring Expenses 0 0 0
Other Operating Expenses 0 0 0
Total Operating Expenses 0 0 0
Operating Income or Loss 178,400 -15,700 46,600
Income from Continuing Operations:
Total Other Income/Expenses Net 700 200 1,600
Earnings Before Interest & Taxes 179,100 -15,500 48,200
Interest Expense 38,800 41,400 42,200
Income Before Taxes 140,300 -56,900 6,000
Income Tax Expense 9,700 -22,200 -3,000
Minority Interest 0 0 0
Net Income from Continuing Op.s 130,600 -34,700 9,000
Non-recurring Events:
Discontinued Operations 0 0 0
Extraordinary Items 0 0 0
Effect of Accounting Changes 0 0 0
Other Items 0 0 0
Net Income 130,600 -34,700 9,000
Preferred Stock & Other Adjustmnts 0 0 0
Net Income Avail To Common Shares 130,600 -34,700 9,000
Quarterly Income Statements: All numbers in thousands)
Period Ending Sep30,2011 Jun30,2011 Mar31,2011 Dec31,2010
Total Revenue 548,000 537,500 420,400 373,300
Cost of Revenue 337,100 340,500 274,000 269,900
Gross Profit 210,900 197,000 146,400 103,400
Operating Expenses:
Research & Development 0 0 0 0
Selling, General & Adminis. 52,400 55,100 44,000 37,700
Non-Recurring Expenses 0 0 0 0
Other Operating Expenses 0 0 0 0
Total Operating Expenses 0 0 0 0
Operating Income or Loss 156,600 144,200 102,400 60,900
Income from Continuing Operations:
Total Other Income/Expenses Net -700 4,000 -1,600 -4,200
Earnings Before Int. & Taxes 157,800 145,900 100,800 61,500
Interest Expense 8,100 8,500 9,600 9,600
Income Before Taxes 149,700 137,400 91,200 51,900
Income Tax Expense 63,800 48,400 30,900 15,400
Minority Interest 0 0 0 0
Net Income from Continuing Op.s 89,200 89,000 57,000 36,500
Non-recurring Events:
Discontinued Operations 0 0 0 0
Extraordinary Items 0 0 0 0
Effect of Accounting Changes 0 0 0 0
Other Items 0 0 0 0
Net Income 85,900 89,000 60,300 36,500
Preferred Stock & Other Adj.s 0 0 0 0
Net Income Avail To Common Shs 85,900 89,000 60,300 36,500
Annual Balance Sheets: All Numbers in Thousands
Period Ending Dec31,2010 Dec31,2009 Dec31,2008
Current Assets:
Cash & Cash Equivalents 306,600 32,800 15,100
Short Term Investments 0 0 0
Net Receivables 235,800 193,300 182,700
Inventory 275,800 294,800 385,100
Other Current Assets 6,100 9,000 6,600
Total Current Assets 824,300 529,900 589,500
Long-Term Investments 207,800 98,700 109,100
Property, Plant & Equipt 473,600 499,700 485,500
Goodwill 0 0 0
Intangible Assets 0 0 0
Accumulated Amortization 0 0 0
Other Assets 9,900 11,200 1,100
Deferred Long Term Asset Charges 192,000 185,500 173,500
Total Assets 1,707,600 1,325,000 1,358,700
Current Liabilities:
Accounts Payable 217,900 213,300 203,600
Short/Current Long Term Debt 2,200 2,100 800
Other Current Liabilities 0 0 0
Total Current Liabilities 220,100 215,400 204,400
Long Term Debt 537,400 611,100 637,700
Other Liabilities 155,700 154,900 163,000
Deferred LT Liability Charges 33,200 31,100 35,700
Minority Interest 0 0 0
Negative Goodwill 0 0 0
Total Liabilities 946,400 1,012,500 1,040,800
Stockholder Equity:
Misc. Stocks Options Warrants 0 0 0
Redeemable Perferred Stock 0 0 0
Preferred Stock 0 0 0
Common Stock 600 500 500
Retained Earnings -486,500 -602,600 -567,900
Treasury Stock 0 0 0
Capital Surplus 1,399,400 1,061,900 1,061,800
Other Stockholder Equity -152,300 -147,300 -176,500
Total Stockholder Equity 761,200 312,500 317,900
Net Tangible Assets 761,200 312,500 317,900
Quarterly Balance Sheets: All Numbers in Thousands
Period Ending Sep30,2011 Jun30,2011 Mar31,2011 Dec31,2010
Current Assets:
Cash & Cash Equivalents 113,600 74,000 127,700 306,600
Short Term Investments 44,500 79,600 106,100 0
Net Receivables 338,200 362,500 348,000 235,800
Inventory 336,700 308,800 327,200 275,800
Other Current Assets 7,400 4,800 6,900 6,100
Total Current Assets 840,400 829,700 915,900 824,300
Long-Term Investments 292,200 268,600 174,100 207,800
Property, Plant & Equipt 478,800 498,100 490,600 473,600
Goodwill 0 0 0 0
Intangible Assets 0 0 0 0
Accumulated Amortization 0 0 0 0
Other Assets 10,800 12,500 9,400 9,900
Deferred LT Asset Charges 154,500 177,800 192,200 192,000
Total Assets 1,776,700 1,786,700 1,782,200 1,707,600
Current Liabilities:
Accounts Payable 292,600 223,700 248,400 217,900
Current Portion LT Debt 2,200 2,300 2,200 2,200
Other Current Liabilities 0 0 0 0
Total Current Liabilities 294,800 226,000 250,600 220,100
Long Term Debt 400,700 509,400 567,600 537,400
Other Liabilities 152,600 160,400 159,600 155,700
Deferred LT Liab. Charges 39,600 43,200 37,100 33,200
Minority Interest 0 0 0 0
Negative Goodwill 0 0 0 0
Total Liabilities 887,700 939,000 1,014,900 946,400
Stockholder Equity:
Misc. Options, WarrantS 0 0 0 0
Redeemable Perferred Stock 0 0 0 0
Preferred Stock 0 0 0 0
Common Stock 1,200 1,200 600 600
Retained Earnings -358,500 -427,000 -498,600 -486,500
Treasury Stock 0 0 0 0
Capital Surplus 1,399,000 1,399,000 1,399,400 1,399,400
Other Stockholder Equity -152,700 -125,500 -134,100 -152,300
Total Stockholder Equity 889,000 847,700 767,300 761,200
Net Tangible Assets 889,000 847,700 767,300 761,200
Annual Cash Flow: All Numbers in Thousands
Period Ending Dec31,2010 Dec31,2009 Dec31,2008
Net Income 130,600 89,000 9,000
Operating Activites:
Depreciation 44,700 47,000 51,300
Adjustments to Net Income -17,300 -10,100 -10,400
Changes in Accounts Recv'bls -52,400 -5,600 20,000
Changes in Liabilities 11,000 -8,900 26,500
Changes in Inventories 7,100 99,400 -93,900
Changes in Other Op'ing Actv's 0 -800 200
Total Cash Flow fr Operations 126,000 86,300 2,700
Investing Activities:
Capital Expenditures -37,700 -23,700 -68,100
Investments 52,900 0 0
Other Cash Flows fr Investing 0 0 0
Total Cash Flows fr Investing -145,800 -23,700 -68,100
Financing Acitivies:
Dividends Paid -14,500 0 -49,000
Sale or Purchase of Stock 337,600 0 0
Net Borrowings -27,200 -49,200 59,300
Other Cash Flows fr Financing 0 0 0
Total Cash Flows fr Financing 295,100 -49,800 10,300
Effect of Exchange Rate Change -1,700 4,700 -3,500
Change in Cash & Cash Equiv.s 275,300 12,800 -58,600
Quarterly Cash Flow: All Numbers in Thousands
Period Ending Sep30,2011 Jun30,2011 Mar31,2011 Dec31,2010
Net Income 85,900 89,000 60,300 36,500
Operating Activites:
Depreciation 12,100 12,200 11,600 11,300
Adjustments to Net Income 22,600 23,000 10,400 -2,800
Changes in Accounts Recv'bls 15,700 -63,300 -55,700 27,900
Changes in Liabilities 72,500 -25,900 33,800 8,300
Changes in Inventories -42,800 20,600 -37,600 -23,300
Changes in Other Oper'g Acts 0 3,400 -1,600 400
Total Cash Flow f Operations 163,200 59,000 21,200 58,300
Investing Activities:
Capital Expenditures -14,100 -11,300 -13,300 -13,300
Investments 63,100 31,600 -78,300 52,900
Other Cash Flows fr Investing 0 0 0 -50,200
Total Cash Flows fr Investing -14,400 -29,900 -129,200 -121,900
Financing Acitivies:
Dividends Paid -17,400 -17,400 -72,400 -14,500
Sale or Purchase of Stock 0 0 0 0
Net Borrowings -89,700 -65,700 -500 -99,700
Other Cash Flows fr Financing -100 0 -100 0
Total Cash Flows fr Financing -107,200 -83,100 -73,000 321,800
Effect of Exchange Rate Chg 0 0 0 -200
Change in Cash & Cash Equiv. 41,600 -54,000 -181,000 258,200
KRO Kronos Worldwide Inc. [Indices near +3.0 or near zero,
or < zero bear special attention.]
P/E Ratio Tests:
Current P/E Ratio < 28? 3.0000 P/E Ratio > 5? 1.0000
P/E Ratio Vs Growth Rate: -0.7700 Forward P/E Ratio < 28? 3.0000
Sales Tests:
Price/Sales Ratio < 2.3? 1.6788 Inventory/Sales < 5%? 0.2628
Sales < $1 billion? 0.6898 Operating Margin < 7.5%? 0.3048
Balance Sheet Tests:
Debt/Equity < 0.40? 0.0088 Long-Term Debt Service: 1.4164
LTD Being Reduced? 2.4000 Short-Term Debt Service: 3.0000
Current Ratio > 2? 1.4250 Working Capital >= 1.5? 0.7016
Leverage Ratio < 20%? 0.8151 Debt / Assets < 1? 3.0000
Quick Ratio > 1? 1.5326 Inventory Turnover > 1? 3.0000
Shares Out Decreasing? 0.0000 Market Cap.> 1.5 Billion? 0.5952
Profit Margin > 7.5%? 1.9280
Income Tests:
Dividend Yield > 2.0%? 2.1429 EPS Annual Growth > 10%? 3.0000
Enterprise Value/Revenue: 0.9800 EPS 5-yr Growth > 20%? 3.0000
Enterprise Value/EBITDA: 0.7743 EPS Growth Consistent? 1.8000
EPS Qrtly Growth > 10%? 3.0000 Collection < 45 days? 0.7580
Rev. Qtrly Growth > 15%? 3.0000 Gross Pft/Cur. LTD < 1? 3.0000
EPS Annual Growth > 10%? 3.0000 Borrowing Int. Rate< 6%? 1.2001
Stock Performance Tests:
Volatility > 25%? 3.0000 % Held by Insiders < 5%? 0.0615
Beta > 1.25? 1.5040 % Held by Institut. < 50? 3.0000
50 Da MA > 200 Da MA? -0.3750 % Held by Institut. > 30? 0.5367
52-Wk Change vs. S&P 500: -0.0307 Short Ratio > 5? 1.2600
Price/Book Value < 3? 1.1100 Short % of Float > 20? 0.9350
Return on Assets > 17%? 1.0947 Average Volume > 100,000? 3.0000
Cash Flow Tests:
Oper. C.F. > Lever'd C.F: 1.5855 Positive Free Cash Flow? 1.0000
Positive Oper. Cash Flow? 1.0000 Price to C.F./sh. Ratio: 0.9459
Cash Flow / Assets >.10? 1.0710
KRO Kronos Worldwide Inc. Overall Zenith Index: 1.5376
Financial Statements |
Income Statement:
Balance Sheet:
Cash Flow Statement:
Financial Ratios |
. . . . . . . . . . . . 1 = Highest , 10 = Lowest
Market Grader |
Intrinsic Value (DCF) |
Intrinsic Value by Discounted Cash Flow Method:
Intrinsic Value (PEG) |
Intrinsic Value by Projected Earnings Growth Method:
Stock Scout |
We find "Scout" to be a bit biased toward the high end, so anything under a 6 is considered a negative, 6 and above, positive.
Projected Earnings |
Research Reports |
Analysts' Opinions |
Insider Activity |
Institutional Activity |
Institutional Orders to Buy or Sell:
Sentiment |
Zenith uses the "sentiment" score above or below 50 to award a positive or negative point in the Decision Matrix.
Short Interest Ratio |
As the short interest rises as a percentage of average daily share volume (Days to Cover), this is considered a measure of negative sentiment. Similarly, a decrease in that percentage is considered positive sentiment.
Stock Report |
Management's Discussion of Results of Operations Excerpts |
Moving Average Chart |
Right Time Study |
Channeling Potential |
The summary below includes a value for `Degree,' which refers on a
scale of 1 to 10 the range of a channel in the period under consi-
deration compared to the total range of price movement. It also looks
for the last closing price to be within the channel, otherwise zeroed.
The `Index' is the `Degree' weighted for volatility. Generally, the
the higher the index, the more suitable is the stock for trading as
a `rolling stock' between channel high and low points.
Results for Kronos Worldwide Inc.:
Symbol? KRO
Total Months Available: 97
Months in Cycle? 4
Months Covered by Periods: 12
Period 1 Period 2 Period 3
H1 L1 H2 L2 H3 L3
33.00 21.07 34.50 19.11 23.88 14.16
RANGE = 34.50 TO 14.16 Close = 22.16
CHANNEL = 23.88 TO 21.07 Degree = 1
Volatility = 12.70% Index = 1
Intraday Chart |
2 Days:
Stock Fetcher |
Point & Figure Chart |
Wall Street Analyzer |
Marketspace Chart |
Time Series Forecast |
Neural Network Prediction |
"Neurostock" can only track long trades. Therefore its performance, as tracked by itself on stocks which are consistently falling, may not appear as good as it could if each "sell" signal were a "short sale."
Ultimate Trading Systems |
The "ultimate systems" are inconclusive, giving no clear confirmed signals.
The corresponding trades for the above chart are shown in tabular form below.
Recommendation |
| Factors | Weighted Points |
|---|---|
| News | + 1 |
| Comparison | + 1 |
| Industry | + 1 |
| Bond Issue | 0 |
| Zenith Index | + 1 |
| Non-GAAP vs. GAAP Earnings < 1% | + 1 |
| Cash Flow | + 1 |
| Ratios | + 1 |
| Market Grader | + 1 |
| Intrinsic Value DCF | + 1 |
| Intrinsic Value DDM | + 1 |
| Stock Scout | - 1 |
| Projected Earnings | + 1 |
| Research Reports | - 1 |
| Analysts | + 1 |
| Executive Perquisites | + 1 |
| Insider Activity | + 1 |
| Institutional Activity | + 1 |
| Management Reporting | + 1 |
| Short Interest | - 1 |
| Sentiment | - 1 |
| Standard & Poor's | + 1 |
| Moving Average | + 1 |
| Right Time Study | + 1 |
| Stock Fetcher | + 1 |
| Point & Figure | + 1 |
| Wall Street Analyzer | - 1 |
| Marketspace Chart | + 1 |
| Time Series Chart | - 1 |
| Neural Network | 0 |
| Stock Options | + 1 |
| Ultimate Trading Systems | 0 |
| Total | + 17 |
Place 1,390 shares of Kronos Worldwide, Inc. (KRO) on the Active List.
