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Press Release Source: Composite Technology
Dutton Associates Announces Investment Opinion: Composite Technology Speculative Buy Rating in Initiating Coverage by Dutton Associates
Monday April 30, 12:45 pm ET
EL DORADO HILLS, Calif.--(BUSINESS WIRE)--Dutton Associates initiates coverage of Composite Technology (OTCBB:CPTC - News) with a Speculative Buy rating and a $3.00 target price. The 12-page report by Dutton senior analyst Gerald A. Rothstein, CFA is available at www.jmdutton.com as well as from First Call, Bloomberg, Zacks, Reuters, Knobias, and other leading financial portals.
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Composite Technology is a rapidly commercializing, development-stage company, providing technologically advanced products to two intriguing segments of the electrical energy market: 1) electrical transmission conductors, with carbon fibers, rather than the more commonly used aluminum. This reduces weight and, very importantly, reduces line sag between towers, thereby increasing the energy throughput. Although sales are still relatively low, they are growing rapidly and, significantly, major buyers in the U.S. and China are placing repeat orders. 2) a wind turbine using advanced technology that has resulted in much longer time between bearing failures (a major source problems in wind turbines). The most up-to-date version of the product, designed for the U.S., was recently certified and a large purchase order was received in April, with the potential for significant add-ons. With the conductor business cash-flow positive and the manufacture of the turbines likely to be self-financing (via deposits and progress payments), there are no pressing needs for additional financing, although if the stock were to rise significantly, management would probably opt for the additional flexibility that an influx of cash would provide. We expect a small loss this fiscal year (September 30) and next, and then to become marginally profitable in fiscal 2009. With a significant level of corporate overhead to cover, we believe that by fiscal 2010, if, as we think likely, significant sales growth continues, profits would expand dramatically.
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