OMNOVA Solutions Inc. (NYSE: OMN )

OMNOVA Solutions an innovator of emulsion polymers, specialty chemicals, and decorative and functional surfaces for a variety of commercial, industrial and residential end uses. It has strategically located manufacturing facilities in the United States, China, France, India, Thailand and the United Kingdom.

Historically, the Company’s sales and income have been seasonal. The Company’s performance in the first quarter (December through February) has historically been weaker due to generally lower levels of customer manufacturing, construction and refurbishment activities during the holidays and cold weather months. The Company has historically experienced stronger sales and income in its second, third and fourth quarters, comprised of the three-month periods ending May 31, August 31 and November 30,respectively.

OMNOVA’s Performance Chemicals segment had sales price index contracts related to approximately 40% ofits sales in the second quarter of 2011 and approximately 65% of its sales for 2009 and 2010. The decrease in the percentage of the sales price index contracts in 2011 is due to the addition of Eliokemn sales.

On December 9, 2010, the Company completed the acquisition of all the outstanding shares of Eliokem International SAS (“Eliokem”) from AXA Investment Managers Private Equity Europe and the other holders of equity securities of Eliokem for an aggregate purchase price of $301.7 million in cash. The Company generated net income of $6.2 million or $0.14 per diluted share in the second quarter of 2011. Included in the second quarter of 2011 are the higher interest expense of $7.7 million, $2.6 million of higher tax expense, $0.8 million of acquisition and integration expense and $0.7 million of restructuring and severance expense.

OMN gained 2.43% on last trading day and a total percentage of 4.83% in the past 2 days. It has 52-week low of $6.00 and high of $9.43. Previous Closing Price $7.18 is below its 20 day moving average $7.68  and its 250 day moving average $7.81. Its volume % change is 12.4%. That means volume is on pace to be 12.4% above average. It has an ongoing P/E of 3.52, which indicates that it seems highly undervalued. The technical indicator has established a strong buy signal.

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