Tronox Continues Barron's Inspired Rally
Shares of Tronox (NYSE: TROX) gapped up at the open on Tuesday, rallying over nine percent to $19.00. That gain follows a smaller rally on Monday.
Over the weekend, widely respected investing outlet Barron's published a positive article about the stock, arguing that it was undervalued and could soon double or even trouble.
Tronox produces titanium dioxide, a white pigment that is used in paints. Demand for Tronox's dioxide has declined notably in recent months, as the global economy has slowed. However, Barron's says that demand could rebound, which would support shares of Tronox.
Shares were trading at about 37 percent discount to stated book value when Barron's wrote the piece, but even now are below the $25 per share book value.
Barron's argues that shares could trade between $30 and $50 when “pigment demand normalizes.” Of the three analysts Benzinga surveyed, all have price targets between $27 and $55 per share.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.