COMPANY DESCRIPTION

PolyOne operates in five segments: Global Specialty Engineered Materials, which provides polymer formulations, services and solutions; Global Color, Additives and Inks, which provides color and additive concentrates, and inks, plastisols, and vinyl slush molding solutions; Designed Structures and Solutions, which provides solutions in engineered polymer structures, rigid barrier packaging and specialty cast acrylics; Performance Products and Solutions, which provides products and services for vinyl molding and extrusion processors, and contract manufacturing and outsourced polymer manufacturing services; and PolyOne Distribution, which distributes engineering and commodity grade resins. 

 

ECONOMIC MOAT

PolyOne has no economic moat.  It relies on superior execution to achieve success.

 

OUTLOOK

PolyOne's top-line continues to struggle. The exit of certain product lines in Brazil and discontinuation of unprofitable product lines reduced sales. POL is making large cuts to operating expenses. Share repurchases will provide an extra lift. The Distribution segment is performing well. This segment distributes more than 3,500 compounds, including non-PolyOne offerings. We expect the positive trend to continue this year. We are optimistic about the 2018-2020 horizon. It is currently sorting through the businesses acquired in recent years, divesting less profitable ones. This process should turn PolyOne into a smaller, but more efficient, company.

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STRENGTHS

  • Broad portfolio of performance and specialty engineered materials

  • Global footprint driving growth 

WEAKNESSES

  • Further goodwill impairment charges could adversely impact the company's results of operations 

THREATS

  • Intense competition may affect PolyOne's sales growth or cash flows

  • Stringent environmental regulations may increase the company's costs and liabilities 

     

OPPORTUNITIES

  • Launch of innovative products likely to help the company in its incremental revenue growth

  • Realignment of manufacturing assets may increase PolyOne’s productivity

  • Expansion of operations likely to help PolyOne in enhancing its geographic presence 

The above report is for information purposes only, and is not a solicitation or offer to buy or sell any securities. Past performance is no guarantee of future performance. Neither diversification nor asset allocation ensures a profit or guarantees against loss. Before investing, investors should consider their risk tolerance, investment objectives, time horizon, available capital, and charges and expenses.  

 

The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.

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