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Tronox Fell 26% in December: An Opportunity for Investors?

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Jan. 3 2019, Updated 8:05 a.m. ET

Tronox fell 26% in December

Tronox (TROX) continued its downward trend in December and fell 26%. Tronox was the biggest loss among specialty chemical companies. Tronox hit a 52-week low of $7.05 in December and underperformed the SPDR S&P 500 (SPY), which fell 9.2%. Chemours (CC) and FMC (FMC) have fallen 0.9% and 10.6%, respectively, while W.R. Grace (GRA) rose ~1.7%.

Tronox is trading 35% below the 100-day moving average price of $12.08. However, Tronox’s 14-day RSI (relative strength index) is at 38, which indicates that the stock isn’t overbought or oversold.

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Why did Tronox collapse?

On December 10, the FTC’s (Federal Trade Commission) chief administrative law judge gave an initial decision regarding the Tronox and Cristal merger. The judge said that the acquisition will likely bring down the competition in titanium dioxide in North America. However, Tronox said that it will continue to work with the FTC on the proposed remedy for merger approval by divesting the two Ashtabula titanium dioxide plants.

Jeffry N. Quinn, Tronox’s president and CEO, said, “Although Tronox is disappointed by the ALJ’s decision, we continue to believe this output-enhancing combination will benefit TiO2 consumers in the U.S. and around the world. We look forward to working with the FTC staff on the proposed remedy, and we appreciate that we are now able, if necessary, to request approval of the remedy from the FTC Commissioners.”

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