KRO

Kronos Worldwide ($KRO) Executives Go on $168K Buying Spree Over 3 Days...Bottom Signal After 55% Crash?

08/14/2025 14:29

Specialty chemicals company Kronos Worldwide ($KRO) is drawing renewed investor attention as executives pile into the stock following a 55% decline over the past year. Kronos Worldwide, founded in 1916 and headquartered in Dallas, is a leading producer of titanium dioxide (TiO2) pigments. TiO2 serves as a crucial white pigment providing opacity and brightness across industries including paints, plastics, cosmetics, and pharmaceuticals. The company markets its products globally under the KRONOS brand and employs approximately 2,500 people worldwide. The most striking development is the concentrated insider buying in recent days. Between August 11-13, 2025, five executives purchased a combined 33,500 shares. EVP Amy Samford bought 3,000 shares at $4.83, Officer Michael Simmons acquired 5,000 shares at $4.87, Officer Bart Reichert made the largest purchase of 20,000 shares at $4.96, Treasurer Bryan Hanley bought 2,500 shares at $4.90, and Officer Andrew Nace purchased 3,000 shares at $5.87. The total purchase value exceeded $168,000. This isn't an isolated incident. CEO Andrew Nace made three consecutive purchases totaling 1,000 shares at an average price of $11.35 in August 2024, and Director Kevin Kramer made a substantial purchase of 14,000 shares at $7.46 in March 2025. The pattern of insider buying during price declines is unmistakable. The insider activity is particularly meaningful given the stock's extreme undervaluation. Trading at 10.65x P/E and 0.82x P/B ratios, shares are priced below book value. The EV/EBITDA multiple of 5.31x appears attractive relative to peers, while the dividend yield of 3.32% exceeds industry averages. The company's fundamentals haven't completely deteriorated. Revenue is projected to grow at an 8.4% annual rate over the next three years, significantly outpacing the 4.5% forecast for the broader U.S. chemicals industry. 2025 revenue is expected to reach $1.98 billion, rising to $2.19 billion in 2026. A crucial tailwind comes from EU policy changes. In November 2024, EU countries approved definitive anti-dumping duties on Chinese titanium dioxide imports. Duties of 0.25 euros per kilogram for Anhui Gold Star Group products and 0.74 euros for LB Group will be imposed from January 2025 for five years. This provides relief from unfair competition with Chinese imports. However, near-term concerns persist. Q2 2025 results showed a loss of $0.08 per share, missing analyst expectations of $0.14 profit. Revenue declined 1.2% year-over-year to $494.4 million. Negative operating cash flow of $4.1 million and negative levered free cash flow of $130.76 million raise questions about cash generation capabilities. The debt-to-equity ratio of 72.11% indicates significant leverage risk. Total debt stands at $610.6 million while cash reserves are just $18.9 million. Although the current ratio of 2.79x indicates adequate short-term liquidity, sustained cash consumption remains concerning. Analyst opinions are mixed. Deutsche Bank maintains a 'Buy' rating while Barclays and Goldman Sachs assign 'Underweight' ratings. The median 12-month price target of $8.00 suggests 32.7% upside potential from current levels of $6.03. The key catalyst ahead is Q3 earnings scheduled for November 5. Analysts expect $0.17 per share profit, which would mark a return to profitability. Full-year 2025 EPS is forecast at $0.60, potentially growing over 50% to $0.93 in 2026. Considering the concentrated insider buying, extreme undervaluation, and structural tailwinds from EU anti-dumping duties, Kronos Worldwide may offer an attractive risk-reward proposition at current levels. However, near-term earnings recovery and cash flow normalization remain critical factors to monitor.