Value
9.0/10data confidence 50%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| Fwd P/E | 6.8 |
| PEG | 10.0 |
- ▸Forward P/E: 18.7x
- ▸PEG: 0.14
- ▸Attractively valued
KRO · Why this verdict
Why Kronos Worldwide (KRO) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Kronos Worldwide trades at a cheap forward multiple with a technically oversold setup within an uptrend and modest insider buying, but quality sits below the engine's floor, the stock has already reached its prior target, and a failed momentum gate alongside three earnings misses in the last four quarters keeps position sizing at avoid.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The quality composite score of 2.5 sits below the engine's 4.0 floor, and the stock has already reached its V8 analyst target, implying -7.5% of downside versus the modeled fair value. Warnings | Quality score should recover to at least 4.0 and the analyst target should be revised higher over the next 12 months for the position to be re-considered viable. | ↓Deteriorating |
| CounterA current ratio of 9.8 shows strong near-term liquidity despite the quality shortfall, suggesting the business is not in immediate financial distress. | ||
The stock trades at a forward P/E of 15.3x with a PEG of 0.11, described in the data as attractively valued. Valuation breakdown | Forward P/E should stay below 18x and PEG should remain below 0.5 over the next 12 months if the discount persists. | ↓Deteriorating |
| CounterA PEG this low can reflect unreliable near-term earnings estimates in a cyclical chemicals business rather than a genuine growth-adjusted bargain. | ||
The stock is technically oversold with an RSI of 23 while still trading above its 200-day moving average, described as an oversold-in-uptrend setup. Momentum breakdown | RSI should recover above 40 while the stock stays above its 200-day moving average over the next 12 months if the pullback resolves constructively. | Tripped→Stable |
| CounterThe failed momentum gate at 3.7 versus the 4.5 threshold suggests the oversold reading may reflect genuine deteriorating momentum rather than a healthy pullback. | ||
The company has missed earnings estimates in 3 of the last 4 quarters, with an average surprise of -184.6%. Earnings | The company should return to at least an in-line or beat result over the next two reported quarters if the miss trend is set to reverse. | ↓Deteriorating |
| CounterThe misses are measured against very small EPS estimate bases (fractions of a dollar in a loss-making period), which can produce outsized percentage surprises that overstate the real magnitude of the shortfall. | ||
Insiders made a low-materiality purchase of $98,510 (0.014% of market cap) in the last 90 days with zero offsetting sells, producing a bullish insider signal. Insider | Insider signal should remain bullish or neutral with continued net buying activity over the next 12 months if the bullish read is predictive. | →Stable |
| CounterThe purchase is explicitly flagged as low materiality, so it may carry limited informational value about management's view of the stock. | ||
The quality composite score of 2.5 sits below the engine's 4.0 floor, and the stock has already reached its V8 analyst target, implying -7.5% of downside versus the modeled fair value.
↓DeterioratingWarnings
- Expectation
- Quality score should recover to at least 4.0 and the analyst target should be revised higher over the next 12 months for the position to be re-considered viable.
CounterA current ratio of 9.8 shows strong near-term liquidity despite the quality shortfall, suggesting the business is not in immediate financial distress.
The stock trades at a forward P/E of 15.3x with a PEG of 0.11, described in the data as attractively valued.
↓DeterioratingValuation breakdown
- Expectation
- Forward P/E should stay below 18x and PEG should remain below 0.5 over the next 12 months if the discount persists.
CounterA PEG this low can reflect unreliable near-term earnings estimates in a cyclical chemicals business rather than a genuine growth-adjusted bargain.
The stock is technically oversold with an RSI of 23 while still trading above its 200-day moving average, described as an oversold-in-uptrend setup.
Tripped→StableMomentum breakdown
- Expectation
- RSI should recover above 40 while the stock stays above its 200-day moving average over the next 12 months if the pullback resolves constructively.
CounterThe failed momentum gate at 3.7 versus the 4.5 threshold suggests the oversold reading may reflect genuine deteriorating momentum rather than a healthy pullback.
The company has missed earnings estimates in 3 of the last 4 quarters, with an average surprise of -184.6%.
↓DeterioratingEarnings
- Expectation
- The company should return to at least an in-line or beat result over the next two reported quarters if the miss trend is set to reverse.
CounterThe misses are measured against very small EPS estimate bases (fractions of a dollar in a loss-making period), which can produce outsized percentage surprises that overstate the real magnitude of the shortfall.
Insiders made a low-materiality purchase of $98,510 (0.014% of market cap) in the last 90 days with zero offsetting sells, producing a bullish insider signal.
→StableInsider
- Expectation
- Insider signal should remain bullish or neutral with continued net buying activity over the next 12 months if the bullish read is predictive.
CounterThe purchase is explicitly flagged as low materiality, so it may carry limited informational value about management's view of the stock.
Per-dimension breakdown
Quality
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 1.3 |
| Net margin | 0.0 |
| Current ratio | 9.8 |
| Moat | 3.1 |
| Piotroski F | 5.6 |
- ▸No competitive moat
- ▸Quality concerns
Growth
6.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.5 |
| EPS growth | 10.0 |
Momentum
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 8.5 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 4.5 |
| erm sentiment | 5.0 |
Insider
7.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider buying (low materiality) — $98,510 (0.012% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.0 |
| quality rank | 0.9 |
| growth rank | 4.4 |
Technical
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.4 |
| support resistance | 3.6 |
| 52w position | 7.2 |
Risk (lower is worse)
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 6.8 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| beta | 7.1 |
| debt equity | 6.0 |
- ▸High IV: 84%
Catalyst
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 6.8 |
- ▸Earnings concerns: 1B/3M
- ▸Earnings in 13 days
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- MOMENTUM:6.5>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.2=NEGATIVE
Warning (1)
- EARNINGS_PROXIMITY:13d<=14d (soft)
Reward-to-Risk
-1.25
Upside
-18.0%
Downside
14.4%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 66, MACD bullish
EdgeInst Constrain — Small cap ($0.8B) below institutional reach
SuitabilityAggressive — MCap $0.8B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -1.2=NEGATIVE outcome against Value at 9.0 and asymmetric R:R of -1.25.
The strongest dimensions are Value at 9.0, Insider at 7.5, and Growth at 6.8; the weakest are Quality at 2.5, Catalyst at 3.4, and Technical at 4.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.25 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality Below Floor Target Reached
Trip ifQuality score falls below 1.5, further below the 4.0 floor.
- P2Cheap Forward Valuation
Trip ifForward P/E rises above 20x, up from the current 15.3x, eroding the value discount.
- P3Oversold Momentum In UptrendTripped
Trip ifRSI rises above 50, ending the currently oversold reading of 23.
- P4Earnings Miss Streak
Trip ifEarnings surprise stays below -100% for 2 more consecutive quarters, extending the current miss streak.
- P5Low Materiality Insider Buying
Trip ifInsider buying reverses into net selling exceeding $200,000 over a 90-day period.