PolyOne (POL) is a provider of specialized polymer materials, services and solutions with operations in specialty polymer formulations, color and additive systems, thermoplastic resin distribution and specialty vinyl resins. PolyOne is a mid-cap stock with a market capitalization of $2.35 billion.
The company is primarily focused on becoming the premier provider of polymer materials on a global level. PolyOne has operations in North America, South America, Europe and Asia. The company operates in four reportable segments: Global Specialty Engineered Materials; Global Color, Additives and Inks; Performance Products and Solutions; and PolyOne Distribution.
The GuruFocus Analysis
The GuruFocus Analysis on PolyOne reports two severe and five medium warning signs on the company. Some of the most pertinent warning signs are:
- The price is near a 10-year high of $25.09.
- The P/B ratio is close to a 10-year high of 3.48.
- The P/E ratio is close to a 3-year high of 34.14.
- The P/S ratio is close to a 10-year high of 0.76.
First Quarter Results
Shares of PolyOne jumped 10% on May 2 as the company released its first quarter earnings. Some of the earnings highlights include:
- The 14th consecutive quarter of double digit adjusted earnings per share expansion
- An EPS of $0.12; earnings per share as adjusted of $0.31 for the first quarter of 2013
- Revenues increased 7.5% over first quarter 2012
- Acquired Spartech which added $54.7 million to the quarterly revenue
- Saw a 29% increase in EPS
The specialty business drove earnings up 34.4% in operating income, and the stock currently trades at 14 times the forward estimates.
Stephen Newlin, chairman, president and CEO of PolyOne, said about the company’s record first quarter:
This truly was a breakout quarter for our specialty business. Since we embarked on our specialty journey, we have overhauled our culture and invested in commercial resources to focus on value-added formulations and solutions for specialty customer applications. These investments are paying off, and I am particularly pleased with our first quarter results as organic mix improvement was at the heart of our 29% expansion in EPS.
With its most recent, record-breaking first quarter PolyOne increased their quarterly dividend by 20% to $0.06 per share.
Senior VP and CFO Richard Diemer said of the financials of the company, “During the quarter, we announced a 20% increase in our quarterly dividend to $0.06 per share, and repurchased 840,000 shares under our existing share buyback program.”
PolyOne offered a quarterly dividend of $0.063 every quarter from November 2000 to November 2002. The offered no dividend until March 2011. Since then the company has declared a dividend every quarter that has increased annually since then.
In response to the recent success of PolyOne, Senior VP and CFO Richard Diemer made a substantial buy on May 13.
Diemer bought 10,000 shares at an average price of $24.17 per share. This cost the CFO a total of $241,700. He now holds on to at least 60,000 shares of PolyOne. Since his buy, the company’s share prices have increased by 3.35%.
Diemer’s buy comes as the price is sitting at a 10-year high. His buy also marks the first insider buy since September 2012.
There are currently five gurus that own shares of PolyOne.
Columbia Wanger holds 1,557,000 shares, representing 1.74% of shares outstanding and 0.16% of assets managed.
James Barrow currently owns the most shares of PolyOne. He holds 3,922,215 shares of the company, representing 4.38% of shares outstanding and 0.17% of assets managed.
Jim Simons holds 135,658 shares, Chuck Royce owns 610,425 shares and Steven Cohen holds the smallest amount with 2,287 shares of PolyOne.
The company’s 10-year financials show consistent growth from 2004 until 2008, when revenue, earnings and income dropped significantly. This drop was due to the company’s expansion to Europe where there was no initial demand for their product. Starting in 2009 the company’s revenue per share has consistently grown.
With its shares up 3.52% today, PolyOne trades at $24.98.
To learn more about PolyOne, check out their GuruFocus page.
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- Insider Cluster Buys: Stocks that multiple company officers and directors have bought.
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- Triple Buys: Companies that both Gurus and Insiders are buying, and Company is buying back.