Through TheFLY's Eyes: PolyOne
The Bottom Of The Food Chain
PolyOne (POL) announced Wednesday morning that June's results would be good, but warned that the second half of the year is looking weaker. Why does what PolyOne reports matter? PolyOne is at the bottom of the food chain for most industries: it makes polymers, colorant, and additive products that go into virtually everything we manufacture and consume.
The company mentioned that it is seeing the signs of a slowdown in housing and automotive businesses, which should be of no surprise, but it is our belief that the company might also be seeing weakness in other areas however it might be too early to quantify.
While PolyOne is not a household name in the investment community, it is a business whose broad footprint provides good insight into a slowing economy. This most likely means other basic material companies should be warning of a weaker second half of 2006 within the next month.