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Zoltek Companies, AŞ Message Board

  • cajaeger cajaeger Jul 10, 2013 11:52 AM Flag

    Analysis of Zolt inventory and revenue

    The summary area for ZOLT has a link over to an article, "Don't Get Too Worked Up Over Zoltek Companies's Latest Numbers" at Motley Fool

    I'd publish the link within this post, but the forum doesn't seem to allow that feature.

    Assuming the data in the article's graphs are accurate, might anyone care to give color commentary on why the finished goods inventory levels are jumping while revenue is not?

    Sentiment: Hold

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    • Yes. Zoltek's largest customer is Vestas, circa 40% of sales. Vestas stock has climbed from 40 to 90 in the last 3 months because they've booked a lot of orders for new wind turbines, particularly the larger ones that use much more carbon fiber than the smaller ones. Zoltek is the carbon fiber supplier for Vestas. Zoltek is also the CF supplier for Gamesa, whose stock has risen from 2.6 to 4.6 in the same period.
      Therefore Zoltek should be building up inventory now to meet the built-in growth in demand that will materialize. Your example illustrates the shortcomings of overreliance on financial analysis without being aware of the background situation. Motley Fool is wrong.