Polypore International Inc. (PPO) analysts keep raising estimates and the company continues to top their expectations. This Zacks #2 Rank (Buy) may not be the best value, but the earnings are showing a fantastic growth story.
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.
Keeps Getting Better
Polypore has been featured as a Zacks Rank Buy a few times already, but the story just continues to improve. Full-year estimates for 2011 are up 12 cents in the past 3 months, to $2.33. Next year’s average estimate rose 9 cents, to $2.90.
Given the $1.34 per share the company earned in 2010, the projected growth rates stand at 74% and 25%, respectively.
Can’t Miss
Polypore has not missed an earnings forecast in the past 9 quarters and has just 1 since going public in 2007. The next earnings release is set of Nov 2 after the close.
The company’s latest release was back in August and while the results for both the top and bottom lines beat expectations, management warned about the coming quarter.
But, given that estimates are still moving higher, analysts are still looking for a good report.
Shares of PPO are going for 23 times earnings, putting the PEG ratio at 1.4. Neither is showing overwhelming value, but not showing a big premium either. Price to sales and price to book however are pretty high, near 3 and 5 times respectively.
Long-Term Trend
You can see below that shares have run up plenty in recent years. But given the soaring estimates (colored lines) it looks to be justified. While the valuations may be high, shares could keep rising as long as estimates keep climbing.
Read the June 24th Feature Here
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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