Year to year growth is almost all from the acrylic business.
I don't remember which 10Q it was, i think Q1 this year where they broke out the sales in the Hungarian sub. Ask them for carbon fiber sales growth year to year.
I will eat my hat if Zoltek has created any new markets from their low cost carbon fiber. This is hype. Read some of my other posts regarding some of the Cabot hype versus reality. All of their current customers have been buying carbon fiber for many years, they just don't need premium product.
If you don't believe that ZOLT has any competition, buy all the shares you can. But I would suggest you place a call to Akzo Fibers (Knoxville, TN) before you do so, as they are currently the world's largest producer of large tow carbon fiber (50K tow) as well as Toray, the world's largest producer of small tow (3,6,12K). Also, ask Zoltek about their competitive position versus Akzo. In the industry they are seen as equal on price with Akzo (well under $10/lb for large customers) offering a better product today (don't believe me ask around at carbon users).
As for the 2MM shares, $60MM will not buy 17 lines. This is just the first installment. This stock will be greatly diluted before they can ever expand that much.
This stock will make millions for the institutions who are in now as they hype it based on earnings growth, get a bunch of individuals hooked and then watch the earnings grind to a halt since all the growth was in acrylic not carbon. I am real interested in what Zoltek tells you if you ask them to break out the sales and earnings growth between carbon and acrylic. If they won't do it (which I'll wager you on), I think that as a shareholder you should be very concerned.
This Hungarian sub. is really interesting. They buy it in Q4 last year, earnings skyrocket, stock follows, issue new stock and then the CFO resigns before they have an independant audit of the foreign sub (which was responsible for the growth). Also, note that they now hire a 34 year old financial analyst as the new CFO. Isn't it funny that such a hot company which plans massive growth, doesn't (can't?) hire an experienced CFO.
I have no position in this stock today, but if I was long, I would hold through the hype over the next several weeks and sell at any sign of weakness above 35.
My two cents - good luck.
Flyguy. |
