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Tronox (TROX) Surges 7.1%: Is This an Indication of Further Gains?

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Tronox (TROX - Free Report) shares ended the last trading session 7.1% higher at $16.82. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 13.7% loss over the past four weeks.

Optimism over strong customer demand on the back of the ongoing economic recovery is driving the stock higher.  The company is benefiting from higher sales volumes of titanium dioxide (TiO2). Higher TiO2 and zircon prices are also aiding its performance. The company’s regional pricing initiatives are supporting prices.

This producer of titanium ore and titanium dioxide is expected to post quarterly earnings of $0.83 per share in its upcoming report, which represents a year-over-year change of +36.1%. Revenues are expected to be $987.86 million, up 6.6% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Tronox, the consensus EPS estimate for the quarter has been revised 2.6% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on TROX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Tronox is part of the Zacks Chemical - Diversified industry. Dow Inc. (DOW - Free Report) , another stock in the same industry, closed the last trading session 4.1% higher at $53.14. DOW has returned -24.7% in the past month.

Dow Inc.'s consensus EPS estimate for the upcoming report has changed +0.6% over the past month to $2.16. Compared to the company's year-ago EPS, this represents a change of -20.6%. Dow Inc. currently boasts a Zacks Rank of #3 (Hold).

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