Polypore International (PPO) Is Today's Strong And Under The Radar Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Polypore International ( PPO) as a strong and under the radar candidate. In addition to specific proprietary factors, Trade-Ideas identified Polypore International as such a stock due to the following factors:

  • PPO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $34.4 million.
  • PPO is making at least a new 3-day high.
  • PPO has a PE ratio of 67.
  • PPO is mentioned 0.84 times per day on StockTwits.
  • PPO has not yet been mentioned on StockTwits today.
  • PPO is currently in the upper 20% of its 1-year range.
  • PPO is in the upper 35% of its 20-day range.
  • PPO is in the upper 45% of its 5-day range.
  • PPO is currently trading above yesterday's high.

'Strong and Under the Radar' stocks tend to be worthwhile stocks to watch for a variety of factors including historical back testing and price action. Market technicians refer to such stocks as being in an accumulation phase before a mark-up and peak. Traders and hedge funds have frequently found that these types of stocks continue to build a solid price base and then ultimately spike higher and peak when others 'discover' how good the stock is performing. By leveraging the social discovery aspect of StockTwits we are highlighting stocks that don't currently receive much attention from retail investors, but we suspect may soon garner more attention.

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More details on PPO:

Polypore International, Inc. develops, manufactures, and markets specialized microporous membranes for the use in separation and filtration processes. PPO has a PE ratio of 67. Currently there are no analysts that rate Polypore International a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Polypore International has been 803,500 shares per day over the past 30 days. Polypore International has a market cap of $2.7 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 1.32 and a short float of 3.8% with 2.78 days to cover. Shares are up 27.2% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Polypore International as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, expanding profit margins, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • POLYPORE INTERNATIONAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, POLYPORE INTERNATIONAL INC increased its bottom line by earning $0.76 versus $0.73 in the prior year. This year, the market expects an improvement in earnings ($1.46 versus $0.76).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electrical Equipment industry. The net income increased by 71.3% when compared to the same quarter one year prior, rising from $8.40 million to $14.39 million.
  • 45.28% is the gross profit margin for POLYPORE INTERNATIONAL INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 10.43% trails the industry average.
  • Powered by its strong earnings growth of 77.77% and other important driving factors, this stock has surged by 33.69% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • PPO's debt-to-equity ratio of 0.80 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that PPO's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.51 is high and demonstrates strong liquidity.

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