Corporate Webpages Solutia Inc.
Solutia (SOA) is a diversified chemical manufacturer of
components which are used in automobiles, building construction,
and airplanes. Products include components for making window glass,
tires, and fuel. Subsequent to when ticker "SOA" was used for
Southern Africa Fund, Solutia has gone through two major
transformations. The first was a spinoff from Monsanto. There
are two reasons why a large corporation might spin off a
subsidiary. One is that a branch of management wants to isolate
the spinoff from the poor management of the parent, such as was
the case with thriving Eastman Chemical that got separated from
mismanaged Eastman Kodak. Another is that the subsidiary is a loser or has
liabilities, such as was the case with Johns Manville and
subsequent Holophane Lighting spinoff, to isolate the subsidiary
from asbestos lawsuits. In Solutia's case, it carried with it
substantial liabilities for PCB manufacturer. It was later
determined Monsanto would remain liable from some of these as
well as certain pension benefits. Solutia fell into the latter
situation which brought about the second major transformation
within a decade after the spinoff, namely Chapter 11 bankruptcy,
from which Solutia has emerged.
Upon its emergence, this St. Louis-based chemical manufacturer
was described as "not the same company it used to be." One
thing we want to note is that unlike the General Motors
bankruptcy, Solutia did not leave its shareholders penniless
holding the "proverbial bag." It offered an exchange for new stock.
So why is it not anything like it used to be? It is settling
with its troubled past, especially cancer victim lawsuit over
the PCB's. It is reducing its high debt level with new
financing. It sells through a direct sales force through much
of the world, and has shifted manufacturing to a number of
places in the world with less environmental restrictions. (This
is one reason why Republicans would like to sacrifice the
environment here by abolishing the EPA, so companies with stay.)
Global economic recovery is showing strong demand for Solutia's
products. Its products remain so diversified they are even used
in e-readers and computers. It will supply its synthetic heat
transfer fluid to the world's largest solar generating facility
by 2013. High debt is the company's biggest problem which it is
paying down. So the future looks much brighter for Solutia than
its past.
We found some anamolies in investor rankings, but the stock
emerged with a fairly high Decision Matrix score anyway. For
example, researchers remain for the most part neutral, but
analysts highly favor the stock. (Analysts seem to react more
quickly to changing conditions.) Standard & Poor's was the most
cryptic of all, giving the stock an extremely poor
"investability quotient" and an extremely high "fair value
ranking" suggesting the stock is under-priced. We gave the S&P
element a negative rating, but were not quite sure what S&P was
telling us except possibly that the stock was speculative.
Earnings growth has been somewhat spectacular, giving the stock
high "intrinsic values."
Put them all together and this stock appears poised for much
higher share price despite some lackluster recent performance.
It does appear to have a somewhat "channeling" appearance
(trading range), where it is just below the area of that range
and poised to go higher.
01-08-2012: Solutia Inc. (SOA): Two Major Recent Transitions
(WAIT FOR PAGE TO LOAD COMPLETELY BEFORE LINKS WORK.)
Company Profile
Company History
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Comparison with Peers
Bond Issue
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Financial Statements
Financial Ratios
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Intrinsic Value (Disc. CashFlow)
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Scout Stock Rating
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Research Reports
Analysts' Opinions
Insider Activity
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Sentiment
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Stock Report
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Moving Average Chart
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Company Profile |
Company History |
News |
Comparison |
Similar Companies Performance:
Bond Issue |
Zenith Index |
Under current market conditions, a Zenith Index Score of 1.20 or above is required for a positive rating on this factor. 1.21 -1.30 is considered acceptable, 1.30-1.40 is consider strong and > 1.40 is considered exceptionally strong. Accounting statements in this section often contain mistakes, especially in earlier years' totals, but data is deemed sufficient for us to give a rating. More accurate financial statements follow in the next section.
Solutia Inc. (SOA ) Sector: Basic Materials
575 Maryville Centre Drive Industry: Specialty Chemicals
St Louis, MO 63141 Exchange: NYSE
Solutia Inc. engages in the manufacture and marketing of performance
materials and specialty chemicals used in a range of consumer and
industrial applications. It operates in three segments: Advanced
Interlayers, Performance Films, and Technical Specialties. The Advanced
Interlayers segment produces polyvinyl butyral (PVB) sheet under the
Saflex brand for automotive, architectural, and solar applications; ethyl
vinyl acetate (EVA) films under the VISTASOLAR brand for photovoltaic
module encapsulation; and specialty intermediate PVB resin and plasticizer
products under BUTVAR brand. The Performance Films segment manufactures,
markets, and distributes custom-coated window films for aftermarket
automotive and architectural applications under the LLumar, Vista,
EnerLogic, FormulaOne, Gila, V-KOOL, H++per Optik, IQue, Sun-X, and Nanolux
brands; and advanced film component solutions for solar and electronic
technologies under the FLEXVUE brand. The Technical Specialties segment
provides chemicals for the rubber, solar energy, process manufacturing,
and aviation industries. This segment principally offers insoluble sulfur
under the Crystex brand; antidegradants under the Santoflex brand; heat
transfer fluids under the Therminol brand; and aviation hydraulic fluids
under the Skydrol brand name. The company sells its products directly to
end users in various industries through direct sales force, as well as
through distributors and franchisees in the United States, Europe, Asia,
Latin America, and Canada. Solutia Inc. was founded in 1901 and is
headquartered in St. Louis, Missouri.
Last Trade: 17.56 52-Week Range: 27.08 - 11.27
Trade Date: 01-06 Avg. Volume: 1,429,680 Shares
Index Membership: Employees: 3,300
Corporate Governance:
Audit (Low Concern), Board (Low Concern), Compensation (Medium
Concern), Shareholder Rights (Medium Concern).
EPS: 2.10 Dividend Amount: $ 0.15 Yield: 0.90%
Ex-Dividend Date: Feb 13, 20 Mkt Cap: $ 2,110,000K
Payout Ratio: 0.00%
Last Split Factor (new for old): N/A Split Date: N/A
Key Statistics:
Enterprise Value: $ 3,320,000K Revenue (ttm) : $ 2,060,000K
Gross Profit: $ 608,000K
Earnings before Income Tax, Depreciation and Amortization: $ 501,000K
Enterprise Value/Revenue (ttm): 1.61 Revenue per Share: $ 17.23
Enterprise Value/EBITDA (ttm): 6.62 Qtrly Rev Growth (y to y): 1.60%
P/E Ratio (fwd projected): 7.98 P/E Ratio (current): 8.35
P/E Growth Ratio (5 yr expected): 0.58 Operating Margin: 18.35%
Price/Sales Ratio: 1.03 Profit Margin: 12.38%
Price/Book Value: 2.22 Book Value: $ 7.94/sh.
Return on Assets: 6.64% Net Income Avl to Common: $ 251,000K
Return on Equity: 31.86% Diluted Earnings/Share: $ 2.10
Qrtly Earnings Growth (yoy): 56.20%
Balance Sheet Items : Cash Flow Items (ttm):
(most recent qrtr) (trailing 12 mo.)
Total Cash: $ 172,000K Operating Cash Flow:$ 223,000K
Total Debt: $ 1,370,000K Lvgd Free Cash Flow:$ 154,750K
Total Debt/Equity: 143.13
Total Cash/Share: $ 1.43
Current Ratio: 2.03
Share Statistics: Stock Price History:
Shares Outstanding: 120,100K Stk 52-Week Change: -29.11%
Float: 118,050K S&P 500 52-Wk Chng: 0.63%
Sh. Short % of Float: 2.60% 50-Day Moving Avg: 16.02
Short Ratio: 2.00 200-Day Moving Avg: 17.15
% Held by Institutions: 92.10% Beta: 2.24
% Held by Insiders: 5.94%
Analysts' Estimates: Cur. Qtr Next Qtr Cur. Year Next Year
___________________________ Dec 11 Mar 12 Dec 11 Dec 12
Average Earnings Estimate 0.47 0.52 1.99 2.20
Average Revenue Estimate 6M 543M 2,080M 2,220M
Factors Comparing This Company to Its Industry Leader (1.0 = Average):
Long Term EPS Growth Rate (5 yr): 7.833 EPS Growth (Qrtly YoY): 7.833
PEG Ratio (ttm, 5 yr expected): 241.604 P/E Ratio (ttm): 16.876
Revenue Growth (Qrtly YoY): 1.602
Annual Income Statements: All numbers in thousands)
Period Ending Dec31,2010 Dec31,2009 Dec31,2008
Total Revenue 1,950,000 1,618,000 2,110,000
Cost of Revenue 1,342,000 1,141,000 1,653,000
Gross Profit 608,000 477,000 457,000
Operating Expenses:
Research & Development 18,000 14,000 12,000
Selling, General & Administrative 259,000 221,000 286,000
Non-Recurring Expenses 0 0 0
Other Operating Expenses 0 0 0
Total Operating Expenses 0 0 0
Operating Income or Loss 331,000 242,000 159,000
Income from Continuing Operations:
Total Other Income/Expenses Net -70,000 -38,000 1,455,000
Earnings Before Interest & Taxes 261,000 204,000 1,614,000
Interest Expense 139,000 121,000 149,000
Income Before Taxes 122,000 83,000 1,465,000
Income Tax Expense 31,000 17,000 227,000
Minority Interest -4,000 -4,000 0
Net Income from Continuing Op.s 91,000 66,000 1,238,000
Non-recurring Events:
Discontinued Operations -9,000 -175,000 -452,000
Extraordinary Items 0 0 0
Effect of Accounting Changes 0 0 0
Other Items 0 0 0
Net Income 78,000 -113,000 786,000
Preferred Stock & Other Adjustmnts 0 0 0
Net Income Avail To Common Shares 78,000 -113,000 786,000
Quarterly Income Statements: All numbers in thousands)
Period Ending Sep30,2011 Jun30,2011 Mar31,2011 Dec31,2010
Total Revenue 519,000 543,000 509,000 489,000
Cost of Revenue 370,000 373,000 347,000 346,000
Gross Profit 149,000 170,000 162,000 143,000
Operating Expenses:
Research & Development 6,000 5,000 6,000 5,000
Selling, General & Adminis. 35,000 58,000 51,000 63,000
Non-Recurring Expenses 0 0 0 0
Other Operating Expenses 0 0 0 0
Total Operating Expenses 0 0 0 0
Operating Income or Loss 108,000 107,000 105,000 75,000
Income from Continuing Operations:
Total Other Income/Expenses Net -2,000 0 -3,000 4,000
Earnings Before Int. & Taxes 106,000 107,000 102,000 79,000
Interest Expense 24,000 26,000 28,000 30,000
Income Before Taxes 82,000 81,000 74,000 49,000
Income Tax Expense 6,000 11,000 8,000 5,000
Minority Interest -1,000 -2,000 -1,000 -1,000
Net Income from Continuing Op.s 76,000 70,000 66,000 44,000
Non-recurring Events:
Discontinued Operations 0 0 0 4,000
Extraordinary Items 0 0 0 0
Effect of Accounting Changes 0 0 0 0
Other Items 0 0 0 0
Net Income 75,000 68,000 65,000 47,000
Preferred Stock & Other Adj.s 0 0 0 0
Net Income Avail To Common Shs 75,000 68,000 65,000 47,000
Annual Balance Sheets: All Numbers in Thousands
Period Ending Dec31,2010 Dec31,2009 Dec31,2008
Current Assets:
Cash & Cash Equivalents 191,000 243,000 32,000
Short Term Investments 0 0 0
Net Receivables 303,000 340,000 337,000
Inventory 275,000 247,000 341,000
Other Current Assets 32,000 67,000 575,000
Total Current Assets 801,000 897,000 1,285,000
Long-Term Investments 0 0 0
Property, Plant & Equipt 911,000 919,000 952,000
Goodwill 740,000 511,000 511,000
Intangible Assets 938,000 803,000 823,000
Accumulated Amortization 0 0 0
Other Assets 147,000 136,000 163,000
Deferred Long Term Asset Charges 0 0 0
Total Assets 3,537,000 3,266,000 3,734,000
Current Liabilities:
Accounts Payable 408,000 363,000 429,000
Short/Current Long Term Debt 0 28,000 37,000
Other Current Liabilities 15,000 62,000 221,000
Total Current Liabilities 423,000 453,000 687,000
Long Term Debt 1,463,000 1,264,000 1,359,000
Other Liabilities 674,000 770,000 965,000
Deferred LT Liability Charges 238,000 179,000 202,000
Minority Interest 7,000 7,000 0
Negative Goodwill 0 0 0
Total Liabilities 2,805,000 2,673,000 3,213,000
Stockholder Equity:
Misc. Stocks Options Warrants 0 0 0
Redeemable Perferred Stock 0 0 0
Preferred Stock 0 0 0
Common Stock 1,000 1,000 1,000
Retained Earnings -703,000 -781,000 -668,000
Treasury Stock -6,000 -2,000 0
Capital Surplus 1,634,000 1,612,000 1,474,000
Other Stockholder Equity -194,000 -237,000 -286,000
Total Stockholder Equity 732,000 593,000 521,000
Net Tangible Assets -946,000 -721,000 -813,000
Quarterly Balance Sheets: All Numbers in Thousands
Period Ending Sep30,2011 Jun30,2011 Mar31,2011 Dec31,2010
Current Assets:
Cash & Cash Equivalents 170,000 169,000 173,000 191,000
Short Term Investments 0 0 0 0
Net Receivables 311,000 338,000 328,000 303,000
Inventory 356,000 328,000 295,000 275,000
Other Current Assets 33,000 31,000 34,000 32,000
Total Current Assets 870,000 866,000 830,000 801,000
Long-Term Investments 0 0 0 0
Property, Plant & Equipt 917,000 934,000 912,000 911,000
Goodwill 742,000 759,000 754,000 740,000
Intangible Assets 912,000 948,000 950,000 938,000
Accumulated Amortization 0 0 0 0
Other Assets 134,000 149,000 149,000 147,000
Deferred LT Asset Charges 0 0 0 0
Total Assets 3,575,000 3,656,000 3,595,000 3,537,000
Current Liabilities:
Accounts Payable 424,000 414,000 402,000 408,000
Current Portion LT Debt 0 0 0 0
Other Current Liabilities 5,000 13,000 20,000 15,000
Total Current Liabilities 429,000 427,000 422,000 423,000
Long Term Debt 1,337,000 1,362,000 1,387,000 1,463,000
Other Liabilities 623,000 652,000 671,000 674,000
Deferred LT Liab. Charges 226,000 248,000 245,000 238,000
Minority Interest 7,000 10,000 8,000 7,000
Negative Goodwill 0 0 0 0
Total Liabilities 2,622,000 2,699,000 2,733,000 2,805,000
Stockholder Equity:
Misc. Options, WarrantS 0 0 0 0
Redeemable Perferred Stock 0 0 0 0
Preferred Stock 0 0 0 0
Common Stock 1,000 1,000 1,000 1,000
Retained Earnings -495,000 -570,000 -638,000 -703,000
Treasury Stock -13,000 -8,000 -8,000 -6,000
Capital Surplus 1,653,000 1,646,000 1,641,000 1,634,000
Other Stockholder Equity -193,000 -112,000 -134,000 -194,000
Total Stockholder Equity 953,000 957,000 862,000 732,000
Net Tangible Assets -701,000 -750,000 -842,000 -946,000
Annual Cash Flow: All Numbers in Thousands
Period Ending Dec31,2010 Dec31,2009 Dec31,2008
Net Income 78,000 68,000 786,000
Operating Activites:
Depreciation 125,000 127,000 115,000
Adjustments to Net Income 36,000 158,000 -792,000
Changes in Accounts Recv'bls 42,000 -45,000 67,000
Changes in Liabilities -5,000 8,000 -21,000
Changes in Inventories -22,000 74,000 -41,000
Changes in Other Op'ing Actv's 0 -47,000 -507,000
Total Cash Flow fr Operations 274,000 251,000 -393,000
Investing Activities:
Capital Expenditures -66,000 -44,000 -99,000
Investments 0 0 53,000
Other Cash Flows fr Investing 0 23,000 -55,000
Total Cash Flows fr Investing -429,000 -21,000 -101,000
Financing Acitivies:
Dividends Paid 0 0 0
Sale or Purchase of Stock -4,000 117,000 672,000
Net Borrowings 170,000 -106,000 -317,000
Other Cash Flows fr Financing 0 -5,000 -2,000
Total Cash Flows fr Financing 127,000 -19,000 353,000
Effect of Exchange Rate Change -24,000 0 0
Change in Cash & Cash Equiv.s -52,000 211,000 -141,000
Quarterly Cash Flow: All Numbers in Thousands
Period Ending Sep30,2011 Jun30,2011 Mar31,2011 Dec31,2010
Net Income 75,000 68,000 65,000 47,000
Operating Activites:
Depreciation 32,000 32,000 33,000 34,000
Adjustments to Net Income -53,000 -14,000 3,000 -12,000
Changes in Accounts Recv'bls 24,000 -4,000 -37,000 35,000
Changes in Liabilities -5,000 7,000 13,000 6,000
Changes in Inventories -29,000 -33,000 -23,000 2,000
Changes in Other Oper'g Acts 0 -10,000 -6,000 -28,000
Total Cash Flow f Operations 41,000 41,000 52,000 89,000
Investing Activities:
Capital Expenditures -30,000 -23,000 -17,000 -38,000
Investments 0 0 0 0
Other Cash Flows fr Investing 0 0 25,000 8,000
Total Cash Flows fr Investing -2,000 -23,000 8,000 -30,000
Financing Acitivies:
Dividends Paid -4,000 0 0 0
Sale or Purchase of Stock -5,000 0 -2,000 0
Net Borrowings -25,000 -25,000 -77,000 -50,000
Other Cash Flows fr Financing -2,000 1,000 -1,000 -3,000
Total Cash Flows fr Financing -36,000 -24,000 -80,000 -49,000
Effect of Exchange Rate Chg 0 0 0 2,000
Change in Cash & Cash Equiv. 1,000 -4,000 -18,000 10,000
SOA Solutia Inc. [Indices near +3.0 or near zero,
or < zero bear special attention.]
P/E Ratio Tests:
Current P/E Ratio < 28? 3.0000 P/E Ratio > 5? 1.0000
P/E Ratio Vs Growth Rate: -0.2600 Forward P/E Ratio < 28? 3.0000
Sales Tests:
Price/Sales Ratio < 2.3? 2.2330 Inventory/Sales < 5%? 0.3545
Sales < $1 billion? 0.5128 Operating Margin < 7.5%? 0.4087
Balance Sheet Tests:
Debt/Equity < 0.40? 0.0028 Long-Term Debt Service: 0.5003
LTD Being Reduced? 2.4000 Short-Term Debt Service: 3.0000
Current Ratio > 2? 1.0150 Working Capital >= 1.5? 0.9862
Leverage Ratio < 20%? 0.5511 Debt / Assets < 1? 2.4176
Quick Ratio > 1? 1.1212 Inventory Turnover > 1? 3.0000
Shares Out Decreasing? 2.4000 Market Cap.> 1.5 Billion? 0.7109
Profit Margin > 7.5%? 1.6506
Income Tests:
Dividend Yield > 2.0%? 3.0000 EPS Annual Growth > 10%? 2.6800
Enterprise Value/Revenue: 1.0733 EPS 5-yr Growth > 20%? 3.0000
Enterprise Value/EBITDA: 0.9457 EPS Growth Consistent? 2.4000
EPS Qrtly Growth > 10%? 3.0000 Collection < 45 days? 0.7934
Rev. Qtrly Growth > 15%? 0.2400 Gross Pft/Cur. LTD < 1? 3.0000
EPS Annual Growth > 10%? 2.6800 Borrowing Int. Rate< 6%? 1.0307
Stock Performance Tests:
Volatility > 25%? 3.0000 % Held by Insiders < 5%? 0.8418
Beta > 1.25? 1.7920 % Held by Institut. < 50? 0.5429
50 Da MA > 200 Da MA? -0.1931 % Held by Institut. > 30? 3.0000
52-Wk Change vs. S&P 500: 0.0420 Short Ratio > 5? 0.4000
Price/Book Value < 3? 1.7800 Short % of Float > 20? 0.1300
Return on Assets > 17%? 0.3906 Average Volume > 100,000? 3.0000
Cash Flow Tests:
Oper. C.F. > Lever'd C.F: 1.4410 Positive Free Cash Flow? 1.0000
Positive Oper. Cash Flow? 1.0000 Price to C.F./sh. Ratio: 0.9739
Cash Flow / Assets >.10? 0.4329
SOA Solutia Inc. Overall Zenith Index: 1.4450
Financial Statements |
Income Statement:
Balance Sheet:
Cash Flow Statement:
Financial Ratios |
. . . . . . . . . . . . 1 = Highest , 10 = Lowest
Market Grader |
Intrinsic Value (DCF) |
Intrinsic Value by Discounted Cash Flow Method:
Intrinsic Value (PEG) |
Intrinsic Value by Projected Earnings Growth Method:
Stock Scout |
We find "Scout" to be a bit biased toward the high end, so anything under a 6 is considered a negative, 6 and above, positive.
Projected Earnings |
Research Reports |
Analysts' Opinions |
Insider Activity |
Institutional Activity |
Institutional Orders to Buy or Sell:
Sentiment |
Zenith uses the "sentiment" score above or below 50 to award a positive or negative point in the Decision Matrix.
Short Interest Ratio |
As the short interest rises as a percentage of average daily share volume (Days to Cover), this is considered a measure of negative sentiment. Similarly, a decrease in that percentage is considered positive sentiment.
Stock Report |
Management's Discussion of Results of Operations Excerpts |
Moving Average Chart |
Right Time Study |
Channeling Potential |
The summary below includes a value for `Degree,' which refers on a
scale of 1 to 10 the range of a channel in the period under consi-
deration compared to the total range of price movement. It also looks
for the last closing price to be within the channel, otherwise zeroed.
The `Index' is the `Degree' weighted for volatility. Generally, the
the higher the index, the more suitable is the stock for trading as
a `rolling stock' between channel high and low points.
Results for Solutia Inc.:
Symbol? SOA
Total Months Available: 46
Months in Cycle? 4
Months Covered by Periods: 12
Period 1 Period 2 Period 3
H1 L1 H2 L2 H3 L3
27.08 21.33 25.09 14.49 18.02 11.27
RANGE = 27.08 TO 11.27 Close = 17.60
CHANNEL = 21.33 TO 18.02 Degree = 2
Volatility = 18.81% Index = 3
Intraday Chart |
2 Days:
Stock Fetcher |
Point & Figure Chart |
Wall Street Analyzer |
Marketspace Chart |
Time Series Forecast |
Neural Network Prediction |
"Neurostock" can only track long trades. Therefore its performance, as tracked by itself on stocks which are consistently falling, may not appear as good as it could if each "sell" signal were a "short sale."
Ultimate Trading Systems |
The "ultimate systems" are inconclusive, giving no clear confirmed signals.
The corresponding trades for the above chart are shown in tabular form below.
Recommendation |
| Factors | Weighted Points |
|---|---|
| News | + 1 |
| Comparison | + 1 |
| Industry | + 1 |
| Bond Issue | 0 |
| Zenith Index | + 1 |
| Non-GAAP vs. GAAP Earnings < 1% | - 1 |
| Cash Flow | + 1 |
| Ratios | + 1 |
| Market Grader | + 1 |
| Intrinsic Value DCF | + 1 |
| Intrinsic Value DDM | + 1 |
| Stock Scout | - 1 |
| Projected Earnings | + 1 |
| Research Reports | 0 |
| Analysts | + 1 |
| Executive Perquisites | - 1 |
| Insider Activity | - 1 |
| Institutional Activity | + 1 |
| Management Reporting | + 1 |
| Short Interest | + 1 |
| Sentiment | + 1 |
| Standard & Poor's | - 1 |
| Moving Average | + 1 |
| Right Time Study | + 1 |
| Stock Fetcher | - 1 |
| Point & Figure | + 1 |
| Wall Street Analyzer | + 1 |
| Marketspace Chart | + 1 |
| Time Series Chart | - 1 |
| Neural Network | - 1 |
| Stock Options | + 1 |
| Ultimate Trading Systems | 0 |
| Total | + 13 |
Place 1,710 shares of Solutia, Inc. (SOA) on the Active List.
