Yahoo Finance Is Now The Time To Put Kronos Worldwide (NYSE:KRO) On Your Watchlist?
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Kronos Worldwide (NYSE:KRO). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Kronos Worldwide with the means to add long-term value to shareholders.
See our latest analysis for Kronos Worldwide
How Quickly Is Kronos Worldwide Increasing Earnings Per Share?
If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Kronos Worldwide managed to grow EPS by 15% per year, over three years. That's a good rate of growth, if it can be sustained.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While we note Kronos Worldwide achieved similar EBIT margins to last year, revenue grew by a solid 12% to US$2.1b. That's encouraging news for the company!
The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.
Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want to check this interactive graph of professional analyst EPS forecasts for Kronos Worldwide.
Are Kronos Worldwide Insiders Aligned With All Shareholders?
Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
It's nice to see that there have been no reports of any insiders selling shares in Kronos Worldwide in the previous 12 months. So it's definitely nice that company insider Amy Samford bought US$19k worth of shares at an average price of around US$9.71. Decent buying like this could be a sign for shareholders here; management sees the company as undervalued.
Does Kronos Worldwide Deserve A Spot On Your Watchlist?
One positive for Kronos Worldwide is that it is growing EPS. That's nice to see. While some companies are struggling to grow EPS, Kronos Worldwide seems free from that morose affliction. The icing on the cake is that an insider bought shares during the year; a point of interest for people who will want to keep a watchful eye on this stock. Even so, be aware that Kronos Worldwide is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...
The good news is that Kronos Worldwide is not the only growth stock with insider buying. Here's a list of them... with insider buying in the last three months!
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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