Trade-Ideas LLC identified

PolyOne

(

POL

) as a weak on high relative volume 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 $25.7 million.
  • POL has traded 68,172 shares today.
  • POL is trading at 3.48 times the normal volume for the stock at this time of day.
  • POL is trading at a new low 3.05% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on POL:

TheStreet Recommends

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 1.9%. POL has a PE ratio of 16. Currently there are 6 analysts that rate PolyOne a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for PolyOne has been 611,600 shares per day over the past 30 days. PolyOne has a market cap of $2.2 billion and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.85 and a short float of 4.3% with 3.67 days to cover. Shares are down 18.5% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates PolyOne as a

hold

. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins, a generally disappointing performance in the stock itself and generally higher debt management risk.

Highlights from the ratings report include:

  • 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. This trend suggests that the performance of the business is improving. During the past fiscal year, POLYONE CORP increased its bottom line by earning $1.62 versus $0.83 in the prior year. This year, the market expects an improvement in earnings ($2.12 versus $1.62).
  • 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 121.2% when compared to the same quarter one year prior, rising from -$14.60 million to $3.10 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Chemicals industry and the overall market on the basis of return on equity, POLYONE CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • POL's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 36.03%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
  • The gross profit margin for POLYONE CORP is rather low; currently it is at 24.48%. Regardless of POL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, POL's net profit margin of 0.39% is significantly lower than the industry average.

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