1 Stock to Avoid in 2013: Kronos Worldwide, Inc. (KRO), Huntsman Corporation (HUN), Tronox Ltd (TROX)

When insiders don’t help

Insider trading is regular at Kronos, but has proved more of a lure-and-trap instance in recent times. Case in point: Kronos’ director Glenn R Simmons has been buying thousands of shares since January. His first purchase price on Jan. 17 averaged $19.18. The stock’s down about 15% since then.

The funny part is that not everyone on Kronos’ board is sure of what’s going on, or what to expect. Even as the Director built his portfolio, Chairman Harold C. Simmons disposed of 200,000 shares on Feb. 24 at $17.25, only to buy back half the number (in a non-open market transaction) at $16.75 on March 12. All investors can do meanwhile is sit and watch, or lick their wounds (if they had fallen for any of the insider buy calls, that is).

Even if you’d like to give a thought to the Chairman’s latest purchase, I’d prefer otherwise. The industry is simply not happening!

Stay away

Trading at under 9 times earnings with a handsome dividend yield of 3.6%, Kronos might appear tempting. Good if you love dividends, but not if you’re looking for some growth as well. Because try as you may, the fact that analysts expect Kronos to shrink a whopping 47% this year is too hard to ignore. More importantly, its peers might offer you more profits.

The article 1 Stock to Avoid in 2013 originally appeared on Fool.com and is written by Neha Chamaria.

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