Tronox Holdings plc (TROX): A Bull Case Theory

We came crossed a bullish thesis connected Tronox Holdings plc connected Value Degen’s Substack’s Substack by Unemployed Value Degen and Athelas Research. In this article, we volition summarize the bulls’ thesis connected TROX. Tronox Holdings plc's stock was trading astatine $6.91 arsenic of February 5th. TROX’s guardant P/E was 21.83 according to Yahoo Finance.

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Tronox Holdings plc operates as a vertically integrated shaper of TiO2 pigment successful North America and internationally. TROX presents a compelling accidental successful the niche chemicals space, producing titanium dioxide, the superior constituent successful achromatic pigment for paint, plastics, paper, cosmetics, and immoderate nutrient additives. The institution is vertically integrated, owning six titanium mines crossed Australia and South Africa, and 8 pigment processing plants globally, giving it a outgo vantage implicit peers and positioning it successful the archetypal quartile of the planetary outgo curve.

This integration allows TROX to vie efficaciously with Chinese producers and maintain strong margins contempt planetary competition. Beyond titanium dioxide, the institution benefits from zircon and monazite byproducts, the latter containing heavy magnetic uncommon world elements similar neodymium and praseodymium, adding optionality and vulnerability to the increasing uncommon earths market. Management is exploring refining monazite further successful Western Australia, perchance positioning TROX arsenic a large Western rare earths supplier implicit the adjacent respective years.

Demand for titanium is expected to grow significantly, driven not lone by accepted overgarment and operation markets but besides by emerging applications successful aerospace, robotics, and drone technology, which could further heighten TROX’s pricing power. While the institution carries a important indebtedness load of $3.2 billion, with precocious involvement costs successful the abbreviated term, its humanities currency flows demonstrate strong net imaginable during cyclical upswings, and economical indicators suggest a favorable macro backdrop.

TROX’s existent valuation remains attractive, with a price-to-sales ratio of 0.42x, leaving important upside from a medium-term people of $15 and imaginable for overmuch higher prices if absorption successfully executes connected indebtedness simplification and uncommon world enlargement plans. Overall, TROX combines outgo leadership, maturation optionality, and uncommon world exposure, offering investors an appealing risk/reward illustration successful the planetary commodity supercycle.

Previously, we covered a bullish thesis on Eastman Chemical Company (EMN) by Necessary-Damage5658 successful November 2024, which highlighted its relation arsenic a compliant chemic supplier benefiting from export restrictions and beardown earnings. EMN’s banal terms has depreciated by astir 24.73% since our coverage. Unemployed Value Degen and Athelas Research stock a akin position but stress Tronox Holdings’ (TROX) vertical integration, uncommon world exposure, and niche chemic positioning.