In my series of the top 25 stocks for the NEXT 25 years I promised you that if anything relevant or game-changing were to come about, I would write it up for your reading pleasure. Well, I have some new news on Zoltek Co. (NASDAQ: ZOLT). I wrote up the initial Zoltek report just last week, but since that publishing, some relevant good news has come up.
Zoltek is the worldwide leader in the manufacturing of carbon fiber material. Carbon fiber has hundreds of applications from sporting goods to aeronautical casings. The most popular application of carbon fiber is as the material of choice for rotor blades on huge energy-generating wind turbines. The carbon fiber is lighter, less prone to friction and therefore far more efficient and cheaper to operate than traditional materials. The Dewind Corporation (a subsidiary of Composite Technology Corp./OTC: CPTC) has contracted Zoltek for the next several years to supply it with enough carbon fiber material to satisfy its growing demand.
This comes on top of the commitment made to Zoltek by the large Danish wind generator company Vestas. Vestas is one of the leading European companies in the energy field and known for its cutting-edge choices in technology and materials.
In my original Zoltek report I estimated that it would generate revenues of $250 million and earnings per share of $1.52 for its 2008 fiscal year ending September 30, 2008. I believe these estimates are very conservative. The CEO and founder of Zoltek, Zsolt Rumy (yeah, I know!), has a publicly stated goal of generating revenues of $500 million for fiscal year 2009. If Zsolt is anywhere near correct, this would be 100% growth for fiscal year 2009 over 2008.
Zoltek has the opportunity to be the relevant, game-changing player as the field grows and becomes more and more mainstream. Look for the automotive sector to next embrace carbon fiber for a number of practical and safety-driven reasons.
Zoltek stock is now at $42.50 with a market capitalization of $1.24 billion, but the best is yet to come....
Georges Yared is the CIO of Yared Investment Research.
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