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|Company||Polypore International |
|Stock Price at Underperform Recommendation||$63.46|
|Star Rating (out of 5)||***|
|Market Cap||$2.62 billion|
|Industry Peers||Pall |
Advanced Battery Technologies
Sources: Capital IQ (a division of Standard & Poor's), Yahoo! Finance, and Motley Fool CAPS.
This week's pitch:
The company was priced for perfection and unfortunately way too many speculators were still in the stock because of the belief that the business was running on all cylinders was going to continue this for the forseeable future.
However, a good part of their business is actually internationally based in Europe and their distress there is likely to affect [Polypore] going forward.
Another reason why their stock wont be going anywhere for at least the next quarter or two is due to the fact that they have constrained production because of a factory that is not open yet. So their financials will most likely be at the same level with the very real risk of poorer performance going forward.
Also, it is a private equity pig. The company is also loaded to the hilt with debt currently at around 712 million. The very real risk of interest rate costs going forward for over leveraged companies like this will be a serious possibility adding millions more to costs going forward.