Kronos Worldwide: Insiders Are Grabbing This 3% Yielder

 |  About: KRONOS Worldwide, Inc. (KRO)
by: Bret Jensen

I added to my Kronos Worldwide (NYSE:KRO) position during Thursday’s selloff. It is dirt cheap, has a solid dividend and should see significant upside in 2012.

7 reasons why Kronos is significantly undervalued at under $18 a share:

1. Numerous insiders have bought over $10mm in shares in last two months, with heaviest accumulation happening in late November.

2. It is selling near the bottom of its five year valuation range based on P/E and P/CF

3. KRO is selling deeply under analysts’ price targets. The median analysts’ price target on Kronos is $36.

4. It has as a five year projected PEG of a ridiculously low .35.

5. Kronos is expected to have rapid EPS growth. It earned $1.29 a share in FY2010, is expected to earn $2.71 in FY2011 and is projected to make $3.37 a share in FY2012.

6. It provides a solid 3.1% yield and is priced at less than 7 times operating cash flow

7. It has a forward PE of just over 5 and is expected to grow revenues at more than 20% in 2012.

Disclosure: I am long KRO.