Zoltek Companies Inc. is an applied technology and advanced materials company. The company has a market cap of $268 million; its shares were traded at around $8.35 with a P/E ratio of 17.7 and P/S ratio of 1.8.
Zoltek CEO Rumy Zsolt has been continually increasing his shares of ZOLT since August of 2008, purchasing about 200,000 shares throughout a four-year period. Zsolt most recently purchased 45,195 shares of Zoltek at an average price of $7.80 on May 30, 2012, the purchase costing his $352,500. Since his trade, the company’s shares have increased by 7.05%.
Zsolt has served at Zoltek’s chairman, CEO, CFO, and president ever since founding the company in 1975. Prior to his work at Zoltek, Mr. Zsolt worked as an accounts manager for General Electric (GE), as well as an industrial marketing manager for Monsanto Company (MON).
Previously, ZOLT was owned by GuruFocus gurus George Soros and Robert Olstein. Each of these gurus held the company for roughly a quarter before selling out. George Soros sold out his shares of ZOLT during the fourth quarter of 2007, and Robert Olstein sold out his shares during the third quarter of 2008.
Meanwhile, other insiders aside from CEO Rumy Zsolt have also been steadily increasing their positions in the company. Like Zsolt, they first began increasing their positions in the company during August of 2008. However, throughout the course of the year 2007, insiders, including Zoltek’s CEO, had been selling off their shares of ZOLT at prices ranging from $30.72 to $42.06 per share, as indicated by GuruFocus insider trade data (link here).
Over the last ten years, ZOLT has reported negative earnings for all years by one (in 2008). The company has a predictability rating of 1 star, and has a margin of safety of -29%, as calculated by GuruFocus’ DCF Calculator (link here). However, it must been kept in mind that DCF results may not be accurate, due to the low business predictability of ZOLT.
Looking back at ZOLT’s public trading history, we see that ZOLT once traded at prices upwards of $50 per share. This occurred at around the third and fourth quarters of 2011. Interestingly, this was around the same time that insiders were heavily selling off their shares of ZOLT. In fact, Zoltek CEO Rumy Zsolt sold 250,000 shares of ZOLT on Aug. 20, 2007, just a little over two weeks after the stock reached its all-time record high of $51.39 on Aug. 9, 2007.
Although debt is not a pressing problem for ZOLT, as the company had $7.76 million of long-term debt and has sufficient cash to pay it off, it should be noted that the company’s cash on hand is steadily decreasing to cover costs of unprofitable operations. In 2007, the company issued $146 million worth of stock. The company’s $322 million worth of assets as of September 2011 consist primarily of equipment and property ownership.
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