I ran across an interesting stock when I was conducting my weekly screens. PolyOne (POL) is:
"a provider of specialized polymer materials, services and solutions with operations in thermoplastic compounds, specialty polymer formulations, color and additive systems, thermoplastic resin distribution and specialty polyvinyl chloride (PVC) resins. It also has two equity investments: SunBelt Chlor-Alkali Partnership, a manufacturer of caustic soda and chlorine and BayOne Urethane Systems, L.L.C., a formulator of polyurethane compounds. The Company offers more than 35,000 polymer solutions to over 10,000 customers across the globe. It has 47 manufacturing sites and 11 distribution facilities in North America, Europe and Asia. The Company operates in six segments: International Color and Engineered Materials; Specialty Engineered Materials; Specialty Color, Additives and Inks; Performance Products and Solutions; PolyOne Distribution, and Resin and Intermediates. In January 2011, the Company acquired Uniplen Industria de Polimeros Ltda."
-Via Thomson Reuters
The fundamentals of this company are very strong. Some of the general metrics I had screened for include:
P/E: 8.6
P/B: 2.65
ROE: 31.5%
ROA: 9.7%
The company is trading at one of the lowest earnings ratios within the plastics and rubber industry. I am also attracted to the fact that POL recently initiated (or technically re-initiated) a dividend currently yielding about 1.1-1.2%.
I would have liked to see a somewhat better balance sheet in terms of the company's liabilities. Currently the D/E is about .88 which is on the high side.
From a cash flow perspective, the company is producing solid cash...TTM free cash is approximately $101m.
It is interesting that the day after I researched this company the stock dropped 5.29% which to me signals an even stronger entry point:
"a provider of specialized polymer materials, services and solutions with operations in thermoplastic compounds, specialty polymer formulations, color and additive systems, thermoplastic resin distribution and specialty polyvinyl chloride (PVC) resins. It also has two equity investments: SunBelt Chlor-Alkali Partnership, a manufacturer of caustic soda and chlorine and BayOne Urethane Systems, L.L.C., a formulator of polyurethane compounds. The Company offers more than 35,000 polymer solutions to over 10,000 customers across the globe. It has 47 manufacturing sites and 11 distribution facilities in North America, Europe and Asia. The Company operates in six segments: International Color and Engineered Materials; Specialty Engineered Materials; Specialty Color, Additives and Inks; Performance Products and Solutions; PolyOne Distribution, and Resin and Intermediates. In January 2011, the Company acquired Uniplen Industria de Polimeros Ltda."
-Via Thomson Reuters
The fundamentals of this company are very strong. Some of the general metrics I had screened for include:
P/E: 8.6
P/B: 2.65
ROE: 31.5%
ROA: 9.7%
The company is trading at one of the lowest earnings ratios within the plastics and rubber industry. I am also attracted to the fact that POL recently initiated (or technically re-initiated) a dividend currently yielding about 1.1-1.2%.
I would have liked to see a somewhat better balance sheet in terms of the company's liabilities. Currently the D/E is about .88 which is on the high side.
From a cash flow perspective, the company is producing solid cash...TTM free cash is approximately $101m.
It is interesting that the day after I researched this company the stock dropped 5.29% which to me signals an even stronger entry point:
Overall, I like this company and from a somewhat "mechanical investing" perspective I think it is a good buy. I have yet to dig through the financial reports to get to the meat of the company, but from the research I have conducted thus far I would likely recommend investing in POL particularly after a nice 5.29% drop.
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