Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified PolyOne as such a stock due to the following factors:
- POL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $21.9 million.
- POL has traded 118,049 shares today.
- POL traded in a range 203.5% of the normal price range with a price range of $1.60.
- POL traded above its daily resistance level (quality: 5 days, meaning that the stock is crossing a resistance level set by the last 5 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.
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More details on POL:
PolyOne Corporation provides specialized polymer materials, services, and solutions with operations in specialty polymer formulations, color and additive systems, plastic sheet and packaging solutions, and polymer distribution. The stock currently has a dividend yield of 0.8%. POL has a PE ratio of 36.2. Currently there are 5 analysts that rate PolyOne a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for PolyOne has been 855,800 shares per day over the past 30 days. PolyOne has a market cap of $3.9 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.38 and a short float of 4.6% with 8.61 days to cover. Shares are up 17.6% year-to-date as of the close of trading on Monday.
rates PolyOne as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 25.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- POLYONE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, POLYONE CORP increased its bottom line by earning $0.97 versus $0.60 in the prior year. This year, the market expects an improvement in earnings ($1.80 versus $0.97).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 92.2% when compared to the same quarter one year prior, rising from $15.30 million to $29.40 million.
- Net operating cash flow has increased to -$74.90 million or 18.14% when compared to the same quarter last year. In addition, POLYONE CORP has also vastly surpassed the industry average cash flow growth rate of -4128.45%.
- Powered by its strong earnings growth of 158.33% and other important driving factors, this stock has surged by 47.71% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- You can view the full PolyOne Ratings Report.