Trade-Ideas LLC identified

Kronos Worldwide

(

KRO

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Kronos Worldwide as such a stock due to the following factors:

  • KRO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $3.2 million.
  • KRO has traded 75,750 shares today.
  • KRO is trading at 5.04 times the normal volume for the stock at this time of day.
  • KRO is trading at a new low 6.02% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on KRO:

Kronos Worldwide, Inc. produces and markets titanium dioxide pigments (TiO2) worldwide. The stock currently has a dividend yield of 9.8%. KRO has a PE ratio of 2. Currently there are no analysts that rate Kronos Worldwide a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Kronos Worldwide has been 411,300 shares per day over the past 30 days. Kronos Worldwide has a market cap of $711.5 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 2.40 and a short float of 21.1% with 7.95 days to cover. Shares are up 6% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Kronos Worldwide as a

sell

. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Chemicals industry. The net income has significantly decreased by 137.0% when compared to the same quarter one year ago, falling from $31.90 million to -$11.80 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Chemicals industry and the overall market, KRONOS WORLDWIDE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for KRONOS WORLDWIDE INC is rather low; currently it is at 15.96%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -3.50% is significantly below that of the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 47.44%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 135.71% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • KRONOS WORLDWIDE INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, KRONOS WORLDWIDE INC turned its bottom line around by earning $0.86 versus -$0.87 in the prior year. For the next year, the market is expecting a contraction of 93.6% in earnings ($0.06 versus $0.86).

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