The firm noted that Polypore's relationship with LG Chem is deteriorating. William Blair's research note states through industry sources that LG Chem has stopped buying separator material from Polypore for both consumer-electronic and electric-vehicle applications, and that LG Chem likely will not resume such purchases in the future. Polypore noted in its fourth-quarter earnings report that it "recorded no revenues from LG."
"Given that sales in Polypore's lithium-ion separator segment were also weak in third quarter 2013, we believe it is likely LG Chem has not purchased a material amount of separator from Polypore since second quarter 2013," William Blair said in its research note.
The stock had a much higher volume than usual on Thursday. More than 3.5 million shares had been traded as of 3:20 p.m., compared to the average of 438.374.
TheStreet Ratings team rates POLYPORE INTERNATIONAL INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate POLYPORE INTERNATIONAL INC (PPO) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income."