Value
6.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 5.2 |
| Fwd P/E | 5.1 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 24.8x
- ▸PEG: 0.15
OLN · Why this verdict
Why Olin (OLN) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Olin Corporation is a chemical producer trading below minimum quality thresholds with zero scores on return on equity, gross margin, and net margin, yet carries a PEG of 0.17 and elevated short interest of 14% alongside a put/call ratio of 1.95, suggesting the market is deeply skeptical of a margin recovery that analysts are pricing in.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Implied volatility of 210% reflects extreme uncertainty about Olin's near-term earnings direction, indicating that options market participants view the range of outcomes as unusually wide and that any catalyst — positive or negative — could produce a large price move. Risk breakdown | Implied volatility falls below 100% within 3 months as quarterly earnings results narrow the uncertainty range. | ↑Improving |
| CounterVery high implied volatility creates attractive premium income opportunities for those willing to write options, and the high volatility may reflect the binary nature of the cycle recovery bet rather than fundamental deterioration. | ||
Olin's current quality score of 1.5 reflects zero scores on return on equity, gross margin, operating margin, and net margin, meaning the company is currently unprofitable and has lost the financial characteristics required to meet minimum investment thresholds. Quality breakdown | Quality score recovers above 4.0 within 12 months as chemical pricing cycles improve and operating margins return to positive territory. | →Stable |
| CounterChemical companies frequently pass through commodity price troughs that temporarily depress margins, and a PEG of 0.17 suggests analysts expect a meaningful earnings recovery that could restore quality metrics quickly. | ||
Short interest of 14% and a put/call ratio of 1.95 reflect significant bearish positioning from market participants who expect continued margin pressure or balance sheet stress, and both metrics are flagged as elevated risk signals. Key risks | Short interest falls below 8% within 6 months as operational improvement reduces bearish conviction. | ↑Improving |
| CounterElevated put/call ratios can also reflect hedging by long-term holders protecting against downside rather than outright bearish bets, and short interest at 14% — while elevated — is not extreme for a cyclical chemical company in a trough. | ||
The PEG ratio of 0.17 implies analysts expect substantial earnings growth that would make the stock extremely cheap relative to its growth trajectory, and the forward P/E of 27.2x reflects recovery earnings rather than current depressed levels. Valuation breakdown | Earnings per share turns positive and grows more than 50% year-over-year within 2 reported quarters, validating the recovery thesis analysts are modeling. | ↓Deteriorating |
| CounterForward P/E of 27.2x is actually high for a commodity chemical company, suggesting the recovery earnings estimates may be optimistic, and the current complete absence of profitability creates execution risk for any recovery thesis. | ||
Implied volatility of 210% reflects extreme uncertainty about Olin's near-term earnings direction, indicating that options market participants view the range of outcomes as unusually wide and that any catalyst — positive or negative — could produce a large price move.
↑ImprovingRisk breakdown
- Expectation
- Implied volatility falls below 100% within 3 months as quarterly earnings results narrow the uncertainty range.
CounterVery high implied volatility creates attractive premium income opportunities for those willing to write options, and the high volatility may reflect the binary nature of the cycle recovery bet rather than fundamental deterioration.
Olin's current quality score of 1.5 reflects zero scores on return on equity, gross margin, operating margin, and net margin, meaning the company is currently unprofitable and has lost the financial characteristics required to meet minimum investment thresholds.
→StableQuality breakdown
- Expectation
- Quality score recovers above 4.0 within 12 months as chemical pricing cycles improve and operating margins return to positive territory.
CounterChemical companies frequently pass through commodity price troughs that temporarily depress margins, and a PEG of 0.17 suggests analysts expect a meaningful earnings recovery that could restore quality metrics quickly.
Short interest of 14% and a put/call ratio of 1.95 reflect significant bearish positioning from market participants who expect continued margin pressure or balance sheet stress, and both metrics are flagged as elevated risk signals.
↑ImprovingKey risks
- Expectation
- Short interest falls below 8% within 6 months as operational improvement reduces bearish conviction.
CounterElevated put/call ratios can also reflect hedging by long-term holders protecting against downside rather than outright bearish bets, and short interest at 14% — while elevated — is not extreme for a cyclical chemical company in a trough.
The PEG ratio of 0.17 implies analysts expect substantial earnings growth that would make the stock extremely cheap relative to its growth trajectory, and the forward P/E of 27.2x reflects recovery earnings rather than current depressed levels.
↓DeterioratingValuation breakdown
- Expectation
- Earnings per share turns positive and grows more than 50% year-over-year within 2 reported quarters, validating the recovery thesis analysts are modeling.
CounterForward P/E of 27.2x is actually high for a commodity chemical company, suggesting the recovery earnings estimates may be optimistic, and the current complete absence of profitability creates execution risk for any recovery thesis.
Per-dimension breakdown
Quality
1.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.1 |
| Gross margin | 0.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 5.1 |
| Moat | 2.5 |
| Piotroski F | 4.4 |
- ▸No competitive moat
- ▸Quality concerns
Growth
5.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.6 |
| EPS growth | 10.0 |
- ▸Declining revenue: -4%
Momentum
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Overbought bear rally (RSI 77)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -1.2%/30d — confirmed downtrend
Sentiment
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.5 |
| Analyst rating | 5.0 |
| Price target | 6.6 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.3 |
| quality rank | 3.8 |
| growth rank | 2.7 |
Technical
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.3 |
| support resistance | 2.4 |
| 52w position | 5.5 |
Risk (lower is worse)
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.9 |
| days to cover | 5.7 |
| volatility | 2.0 |
| put call | 0.0 |
| implied vol | 2.6 |
| beta | 6.2 |
| debt equity | 3.2 |
| news risk | 6.0 |
- ▸High short interest justified: 16%
- ▸Elevated put/call: 4.12
- ▸High IV: 64%
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.8 |
| news activity | 5.0 |
- ▸Earnings in 6 days
- ▸Dividend: 3.4%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (4)
- MOMENTUM:5.3>=4.5
- INSIDER:OK
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.2=NEGATIVE
- EARNINGS_PROXIMITY:6d<=7d
Warning (2)
- MOMENTUM:5.3<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.23
Upside
-3.4%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $2.7B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -0.2=NEGATIVE outcome against Insider at 7.3 and asymmetric R:R of -0.23.
The strongest dimensions are Insider at 7.3, Value at 6.9, and Growth at 5.8; the weakest are Quality at 1.5, Technical at 3.1, and Risk (lower is worse) at 3.5. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of -0.23 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Margin Collapse Quality Failure
Trip ifQuality score remains below 2.0 for 3 or more consecutive assessment periods, indicating no margin recovery is materializing.
- P2Elevated Short And Put Call
Trip ifShort interest rises above 18%, signaling bearish positioning is intensifying rather than unwinding as the recovery thesis plays out.
- P3Deep Value Peg Discount
Trip ifEPS surprise falls below -30% for 2 of the next 3 quarters, indicating the recovery earnings estimates embedded in the PEG ratio are materially wrong.
- P4High Implied Volatility Uncertainty
Trip ifImplied volatility rises above 250% and sustains for more than 30 trading days, indicating uncertainty has expanded rather than contracted.