Polypore International, Inc. (PPO) is coming off of a very strong quarterly report. Not only did the company show solid results, but also had very encouraging words from the CEO.
This Zacks #1 Rank (Strong Buy) is focusing on long-term growth and analysts continue to push forecasts higher.
Company Description
Polypore makes specialized polymer membranes used in separation and filtration process. The company’s energy storage and separation media is used in lead-acid batteries in the transportation and industrial industries. Its separations media segment focuses on healthcare applications like blood oxygenation and hemodialysis as well as specialty industrial applications.
Rapidly Growing Demand
On Feb 23 Polypore reported full-year and fourth-quarter results. Sales were up 12% in Q4, to $169.5 million, which led to a 17% increase in EPS. Earnings per share came in at $0.42, which was up from $0.36 and beat expectations by 8 cents.
Polypore’s CEO went on to give some great comments about the company’s progress throughout 2010. He talked about substantial growth in each segment and undertook “significant capacity expansions.” Yet, while undergoing the biggest expansion in company history, they still managed to cut debt, generate cash and enhance its capital structure.
Long-Term Growth
Polypore said the long-term drivers look good and will do whatever they can to “ensure sustainable growth over the long term.”
Analysts went on to raise their forecasts on the news. Full-year estimates for 2011 average $1.75, up from $1.63. The Zacks Consensus Estimates for 2012 jumped 32 cents, to $2.22. Given the $1.34 Polypore earned in 2010, projected growth rates are now 31% this year and another 27% next year.
Secondary Offering
Shares of PPO saw a sharp drop in mid March when 4.5 million shares were sold by private investors. They priced the sale at $52.75, which caused the stock to fall to that price, but since then shares have bounced right back and are nicely above that level.
The Chart
Below you can see the long-term earnings trend for PPO. Analysts are increasingly bullish on the company and it is showing in their earnings estimates. We are seeing year-over-year gains as well as rising estimates throughout the year. A very bullish trend for PPO.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service
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