Improving Organic Growth & Easing Raw Material Costs Could Lead to Outperformance
- Organic growth improved to 5% in 1Q17 (March), the best performance in years, aided by salesforce additions (raised 6% in 2016 and 2015) and end-market improvement.
- Operating margins are forecast to expand to nearly 10% in 2018 (from less than 7% in 2012) due to new products and the shift to Specialty products (now accounting for around 80% of operating income from only 2% in 2005).
- The shares are still off 12% from their July 1, 2014 high of $43, despite EPS projected up 9% in 2017 to a record $2.32 and 12% in 2018 to $2.59.
PolyOne is a provider of polymer materials, services and solutions with operations in engineered materials, composites, color and additive systems and polymer distribution. The company is also a developer and manufacturer of additives, liquid colorants and fluoropolymers and silicone colorants. Co.'s segments include: Color, Additives and Inks, which is a provider of custom color and additive concentrates for thermoplastics, dispersions for thermosets, and specialty inks, plastisols, and vinyl slush molding solutions; and Specialty Engineered Materials, which is a provider of specialty polymer formulations, services and solutions for designers, assemblers and processors of thermoplastic materials.
Great Lakes Review is located in Cleveland, Ohio, was founded in 1981 and became a division of Wellington Shields & Co. LLC in 2011. Great Lakes Review is a research boutique focused on the fundamentally-oriented investor seeking companies that dominate their respective specialty niche regardless of industry. The objective is to make money for the long-term by gradually accumulating a diversified portfolio from a universe of no more than 30 companies. Although short-term-oriented accounts will be alerted to trading opportunities, aggressive sell recommendations are triggered only by a deterioration in long-term fundamentals, not by short-term blips or investor fancy. Coverage of those names that lose their earnings momentum or earnings predictability may be dropped and replaced with more vital candidates.
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