Chandler Lutz

The Long Case for PolyOne Corporation

Nice Article! Great Analysis. It's really nice to see an investment thesis for a change on this site...A couple of things though. I noticed through a thumbnail analysis of the company that YoY inventories are up 10.9 percent will sales are up only 8 percent; and even more discouraging QoQ sales are up a meager 13 percent compared to a 22 percent jump in inventories. It's possible that there is some seasonality in there sales that they are building up for, but I can't see it. Also, you said that the company is engaged in a commodity business. What gives them their competitive advantage? It is being low cost?...I don't know if I see it as SG&A expense has increased about 14 percent YoY, also faster than sales.

One last thing, would you call this company a turnaround play as they are trying to diversify away from housing and North America or a cyclical where earnings would pop if housing picked up...

Your thoughts?