Look, if I wanted a company to build cash for investing in marketable securities, I would've bought an insurance company.
Since well over a year ago, ZOLT's building and equipment line has hovered at about $30M with inventories at about $12M. Their cash position has changed from about $8M to about $75M. Wow -- where did all this cash come from? From operations - no! From investing - no! It came from selling more stock ($65M alone in Sept 96).
And what did they do with this cash that they raised during last year. NOTHING (except invest some of it in marketable securities). In March of 96 equity was about $30M with 5M shares out and a year later equity is about $100M with 17M shares outstanding -- about 6 bucks a share then and now.
So what I meant by "anemic" was that there is little information or change in the balance sheet which gives me confidnece that they're using working capital in the way they claimed they would.
Since you buy, tuck away and forget I wish you well. I like your buy low, sell high technique - very insightful. When I buy a company, I can't help taking in interest in what the hell they're doing. So if it's okay with you, I'd like to ask other owners for their input regarding questions I have; you, on the other hand, can tuck yourself away, ignore me, and make your small fortune.
Good Luck!! |
