Sunday, September 04, 2011

RSY XXXXV: Buy KRO

Sabrient rates Kronos Worldwide, Inc. (KRO) a Strong Buy for its superior scores for growth, value and momentum, three important metrics that indicate future market outperformance with scores of 93.2, 85.7 and 83.9 respectively (100 being highest). Tuesday is the day to jump on this company that has shown consistently conservative accounting practices as the next ex-dividend date for KRO is September 7th with a dividend of 15 cents per share. In addition to having high growth, value and momentum scores, KRO has outstanding Sabrient scores in Earnings, Balance and Fundamental scores with scores of 99.8, 65.3 and 91.1 respectively. These are factors that the RSY portfolio looks for with respect to long term investments.

KRO is a producer and marketer of titanium dioxide pigments and thus is considered a basic materials sector stock under the chemical manufacturing industry. This should be a good replacement for our profitable position of LZ that RSY exited after Berkshire Hathaway Inc. offered to buy out LZ. There is no way to know if KRO will be a buyout candidate, but insiders find future prospects encouraging and are buying accordingly. Sabrient has also noted KRO for its outstanding GARP (growth at a reasonable price) attributes and has added it to its top 10 GARP stocks.

RSY portfolio recommends a buy order of 400 shares of KRO at a limit price of $20.99 (good for the day). Hopefully, there will be some weakness in the opening moments to capture KRO at a good price, but if not RSY does not want to chase a gap up in prices or pursue it if we miss it on Tuesday after the ex-dividend date.

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