We all know that POL is worth more than the current price, and most notably, so do most MM's. Since most of us are long term investors we should not worry about the small 3% increase in price today. It is far better for the stock to gradually ascend then to see a 10 - 15% gain in one day.
Since it is an efficient market, stocks will always be rewarded in the end, i.e., "earnings always win!"
If you want to participate in the growth of POL then don't sell when it comes under pressure. I saw the same thing happen to PWEI (PVC pipe maker). The stock went to $24, lost $3-$4 in three days, then shot up to $31 in about a week.
Before POL reaches a new trading range (my guess is $13 -$14) you will probably see it drop back to high $8's. This will be the last shake-out before it hits new highs.
Wilson's earnings report clearly was designed to crow about the increased earnings YTD vs LYTD. Buried in the cackle was the fact that 25% of the positive cash flow during the first quarter came from the proceeds of divesting the Engineered Film Business Unit.
Another 20% ($14 MM) came from "lower personnel costs."
This isn't better cash flow from growth, it is from pruning.
He remaks that 2006 earnings will be "SUBSTANTIALLY above 2005." Well, what does "substantially" mean? For example, having your head above water is substantially better than having it below, but you're still treading water while the competition swims past.
The most honest remark was from the noob, babe, Newlin:
"It will take some time to grow."
It is a new business? Really? How?
dnadesi, do you even know which business unit POL most recently sold, and whose proceeds contributed to 25% of the positive cash flow POL reported during the past quarter?
Do you know where accruals of $14MM came from that POL added into this cash flow?
Answering these should keep you busy for a while.
Its a new business? I see, this obviates the need to look at the past, even though most of the same people from the recent past [with non-trending upward price] are still running the company.
Actually, I live in the present - I look only at the recent past to make trading decisions for today, and tomorrow is another day to do the same.
The price chart will tell the story, won't it? The efficient market synthesis of the company performance is resolved into the price of the moment.
Talk to you then, if not sooner, whether your moment is a few days, or a few weeks, whatever timeframe interests you.
I try to speak just for myself, as opposed to using "we" and "us" as you do.
Just to remain factual, a quick look at a long term chart on Polyone and its predecessors came up with these approximate share prices vs. the 12/31 dates;
And going back another 10 years;
So much for steady upward trend, although there was an obvious steady downward trend from 1998 to 2001. The business is cyclical. The price is volatile. It is a good stock for short term trading.
It is an efficient market -- the market so far is discounting the extraordinary earnings -- there is a reason which will become clearer to all, I'm sure as time goes on.
YOu don't select a company like POL to "participate in its growth". You buy POL to trade its volatility.
Between now, $8 and the $13-$14 dollar range, there will be many good trades. Lately they have been happening once a week or better, at 2% to 4%+ per trade.
I'm curious how you could come up with $/sh POL before 12/31/2000? Geon? Sullivan? M.A. Hanna? etc.?
Anyway, your point is made. POL has shown no long term growth since its inception September 2000, which is particularly unexpected while there have been such strong performance in housing and auto segments, where POL claims to have most of their customers.
What about Steve Newlin? Well Samo, I appreciate you giving the Noob some credit. At least he didn't make an idiot of himself a la Steve Wilson whose stated goal is to "help competitors remain competitive." LMAO!
Newlin seems realistic, since he stated that it will "take some time to grow." This would be nice to hear if it didn't sound like "Fixing the Fix."
The rest of what he said was pretty much what I'd expect: Everything they teach you in MBA school: "POL has indepth knowledge of high value applications" (he doesn't know what they are yet). "Strategic targeting of Market Segments, Good management team, Investment in commercial resources" Yada, yada, yada.
Most appropriately he was able to repeat, parrot-like;
Maybe Polly wants a fortune cookie?
Well, dnadesi, you're quite financially profound, and I certainly give you credit for recycled platitudes.
But, you see, we've been watching POL more than just this past week, month, or year. Samo and I have watched it for 6 years now and I would have been THRILLED to see ANY gradual ascention over this entire time period!