"Despite the recent economic slowdown, Hexcel (NYSE: HXL) is seeing its market for carbon-fiber-based aerospace products and parts boom," says energy sector expert Elliott Gue.

The contributing editor to Personal Finance explains, "And in addition to growing aerospace demand, the firm has growing markets in wind power and nuclear power." Here is his review.

"Hexcel makes lightweight carbon-fiber parts used on modern aircraft designs. New aircraft designs such as the 787 incorporate far higher carbon-fiber content than older planes, so Hexcel is becoming an increasingly important supplier.

"The aerospace demand cycle isn't directly tied to demand for air travel. Airlines and aircraft leasing firms typically plan their purchases of new planes many years in advance; the aerospace cycle is highly visible and longer-term in nature.

"Currently, demand for modern fuel-efficient aircraft such as the 787 Dreamliner from Boeing (NYSE: BA) is booming. Hexcel recently reported fourth quarter results and offered management's outlook for the year ahead. Just over 50% of the company's total sales come from the commercial aerospace market.

"The market is booming: Sales surged more than 21% compared to the fourth quarter of 2006 in constant dollar terms. Hexcel sells to both Airbus and Boeing which have a combined acklog of nearly 7,000 planes that have been ordered but not yet delivered.

World leader in carbon fiber manufacturing, Zoltek Companies Inc. (Nasdaq: ZOLT) reported strong 2Q 2007 earnings [pdf] on May 4. Net sales increased 40% to $36.7 million. Operating income increased a whopping 87% to $5.9 million, and the company reported a $3 million increase in cash flow compared to the same quarter last year. Zoltek is on a tear, with this quarter's sales increasing 21% from last quarter's sales. The combination of 1Q + 2Q shows net sales increasing by 60% to $67 million, with operating income increasing from $1.4 million to $8.1 million. Zoltek has made tremendous strides in controlling costs and returning to profitability. 2Q 2007 net loss was breakeven per share compared to 2Q 2006 net loss of $27.7 million, or $1.31 per share.

Zoltek is looking forward and planning for much future growth. Two new production facilities in Hungary come into operation in 2Q 2007, with two more new production facilities scheduled to come into operation in 3Q and 4Q 2007. Thus Zoltek will be able to increase productivity at the same time as prices are continuing to increase, generally a happy situation for investors. The increased production capacity will come in handy as Zoltek just negotiated a deal with Vestas Wind Systems to supply $300 million worth of fiber materials over the next 5 years. Zoltek is scheduled to ramp up to annual production of more than 10,000 metric tons of carbon fiber by 2008, compared to 2,800 metric tons annual production currently.

This stock is thinly traded and thinly followed, but may repay investors willing to dig around doing their own due diligence. The stock closed at $35.94 recently, down $0.34.