Minyanville's Sean Udall dares to share the kind of keen insight and actionable information you won't find in any prospectus. Here he answers a reader's burning question about "green" stocks. For more original thought, visit www.minyanville.com.

Professor Udall,

Do you have any opinions on Zoltek Companies, Inc. (NASDAQ: ZOLT)? My wife wants me to buy everything "green". Her last "green" company idea was General Electric (NYSE: GE). I know, right? I bought a little just to quiet the noise level. I'm into a little SunPower (NASDAQ: SPWR) and Evergreen Solar (NASDAQ: ESLR). Does Zoltek have legs?

Thanks,

Minyan L.

Minyan L.,

First, that's hysterical. Second, a word of caution: Going all green, or all of any one thing, is something I'd never advocate. If you do, you do so at your own risk, as nothing in the market is ever as obvious as it seems, especially when it seems totally obvious.

As for Zoltek, I've always had a hard time getting my arms around the volatility that is this company. I invest in and trade many stocks with high to very high volatility, but the way Zoltek trades has never struck a cord with me.

Additionally, with respect to high beta, I tend to like companies with cash-rich (preferably net cash) balance sheets and volatile Zoltek isn't sporting that big green stockpile.

In my opinion, the highest quality solar plays are Cypress Semiconductor (NYSE: CY)/SunPower, Trina Solar (NYSE: TSL) and Suntech (NYSE: STP). Evergreen Solar is my flyer as it will need capital, but I believe it's for viable reasons.

I currently favor solar over wind from a longer-term thematic standpoint, but that doesn't mean I don't see the wind thesis and think longingly about the American Superconductor (NASDAQ: AMSC) shares I owned not too many months ago.

If you're looking specifically for wind plays, you may want to investigate Thomas & Betts (NYSE: TNB). It's a well valued stock that's trading way off highs.

Sean

Position in TSL, ESLR

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Disclosure: Horowitz & Company clients may hold positions of securities mentioned as of the publish date. Andrew Horowitz is a money manager and author of bestselling The Disciplined Investor - Essential Strategies for Success. Data provided by Briefing.com and other sources believed to be reliable. Dates may change without notice.

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• Deutsche Bank downgraded shares of Procter & Gamble (NYSE:PG) to Hold from Buy on valuation and their expectation for slowing short-term industry growth, especially in beauty.
  
• Citigroup downgraded Human Genome (NASDAQ:HGSI) to Hold from Buy as they believe giving up Syncria's royalties removes an important value driver for the stock.
  
• HSBC downgraded shares of Arcelor Mittal (NYSE:MT) to Neutral from Overweight on valuation and believes the company needs to raise prices more than costs have risen for iron ore, coking coal and steel scrap.

• BAE Systems (NASDAQ:BAESY) was cut to Equal Weight from Overweight at Morgan Stanley.
  
• Merrill downgraded Zoltek (NASDAQ:ZOLT) to Neutral from Buy.
  
• Credit Suisse downgraded Illinois Tool Works (NYSE:ITW) and International Paper (NYSE:IP) to Neutral from Outperform.

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Here are a few highlights of this past week's earnings coverage from BloggingStocks:

• Abercrombie & Fitch Co. (NYSE: ANF) beat estimates on strong sales and higher profit margins.
• Baidu.com Inc. (NASDAQ: BIDU) profit soared on strong revenue from online marketing.
• Coca-Cola Co. (NYSE: KO) earnings and revenue surged in the fourth quarer.
• Dean Foods Co. (NYSE: DF) missed expectations on rising commodity costs and lower profit margins.
• Deere & Co. (NYSE: DE) posted better-than-expected profits as rising grain prices spurred demand.
• Goodyear Tire & Rubber Co. (NYSE: GT) posted solid results on cost savings and debt reduction.
• Insight Enterprises Inc. (NASDAQ: NSIT) beat expectations and raised its guidance.
• LECG (NASDAQ: XPRT) posted a net loss despite a slight increase in revenue in the fourth quarter.
• Loews Corp. (NYSE: LTR) missed estimates due to profit decline in its CNA Financial (NYSE: CNA) affiliate.
• Marsh & McLennan Inc. (NYSE: MMC) missed estimates on weakness in its insurance services business.
• Playboy Enterprises Inc. (NYSE: PLA) posted disappointing results on weakness in publishing and TV.
• Qwest Communications International Inc. (NYSE: Q) fourth-quarter and full-year results met estimates.
• Sierra Wireless Inc. (NASDAQ: SWIR) beat esimates on the launch of new product s.
• Taser International Inc. (NASDAQ: TASR) profits doubled, which was in line with expectations.
• Visteon Corp. (NYSE: VC) posted a fourth-quarter loss on restructuring costs and write-downs.
• Waste Management Inc. (NYSE: WMI) beat espectations and offered 2008 guidance.
• Wyndham Worldwide Corp. (NYSE: WYN) earnings met expectations and were buoyed by lodging revenue.
• Zoltek Companies Inc. (NASDAQ: ZOLT) missed earnings estimates due to inventory buildup.

Upcoming results to watch for include Wal-Mart (NYSE: WMT), Hewlett-Packard (NYSE: HPQ), OfficeMax (NYSE: OMX), Whole Foods (NASDAQ: WFMI), MGM Mirage (NYSE: MGM), JCPenney (NYSE: JCP), and Safeway (NYSE: SWY).

Visit AOL Money & Finance for more earnings coverage.

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"Alternative energies are not just a pie-in-the-sky dream," says Paul Tracy and Nathan Slaughter from the StreetAuthority Market Advisor. "Denmark generates as much as 30% of its power from wind, Iceland uses geothermal energy, and producers are bringing down the cost of solar power."

"Overall, companies involved in alternative power technologies, such as wind, solar, geothermal, and biomass, are getting plenty of attention from investors these days." Here, the advisors profile what they consider to the most attractive companies in the alternative energy space.

Suntech Power Holdings Co. (NYSE: STP), "which manufactures and sells photovoltaic (PV) solar cells, has two primary advantages: a low manufacturing cost base and highly efficient cells.

"For starters, Suntech is based in China, where labor costs (even for skilled research staff) are far lower than in the Western world. The Chinese government also subsidizes such research, further helping companies like Suntech.

"In addition, the firm's cells boast some of the highest conversion rates on the market, allowing the company to offer smaller panels that can produce as much electricity as far larger ones from competitors.

"Suntech has been ramping up its manufacturing capacity rapidly in recent years to keep pace with strong demand. Analysts are forecasting robust earnings growth of 45% annually over the next five years.

"Zoltek Companies Inc. (NASDAQ: ZOLT) makes carbon fiber, a synthetic material that is both extraordinarily light and strong. Wind power represents Zoltek's largest and fastest growing market.

"Fiber blades because they're lighter and more efficient than metal or other materials. In fact, the company has been struggling to build out its manufacturing capacity quickly enough to meet demand. In the meantime, the firm has been signing key long-term supply arrangements with some of the world's largest wind power companies, like Gamesa of Spain and Vestas of Denmark.

"ZOLT shares are currently trading at 33 times next year's earnings -- a discount to the company's projected long-term growth rate of nearly +38%. As wind power continues to increase in popularity, ZOLT could extend its recent winning streak for years to come.

"Ormat Technologies Inc. (NYSE: ORA) is among the world's largest builders of geothermal power plants -- those using the Earth's own heat to produce clean, renewable power. The company's plants are installed in Hawaii, California, New Zealand, the Philippines, and Thailand, among other places.

"Geothermal power has been among the more successful and low-cost alternative energy sources in markets where sufficient geological heat is available. Ormat has a proven track record of building working geothermal plants all over the world, and that reputation gives the firm a key competitive advantage.

"The company's technology is field-tested and reliable, and its plants are backed up by several patents. That impressive track record makes it easier for the firm to win contracts to build new plants.

"Even better, Ormat actually owns a dozen of its own geothermal plants and has another half dozen under construction at this time. This should provide a steady stream of recurring revenues. With this in mind, Ormat is one of our favorite pure-play alternative energy stocks."

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment commentary and favorite stocks of the nation's leading financial newsletter advisors.

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MOST NOTEWORTHY:

• UBS resumed coverage of Novartis AG (NYSE: NVS) with a Buy rating and AstraZeneca (NYSE: AZN), Roche Holding (OTC: RHHBY), Sanofi-Aventis (NYSE: SNY) and GlaxoSmithKline (NYSE: GSK) with Neutral ratings.
  
• Deutsche Bank believes new product leverage can bring upside to consensus operating margin expectations at Microsoft Corporation (NASDAQ: MSFT) and they view shares as attractively valued given its growth profile. The firm started shares with a Buy rating and $33 target.
• Keybanc initiated shares of Salesforce.com (NYSE: CRM) with a Hold rating and sees slowing growth rates for revenue and net subscriber additions throughout the remainder of FY08 and beyond and thinks investor expectations are too high.
• Keybanc also started shares of Taleo Corporation (NASDAQ: TLEO) with a Buy rating and $27 target, as it is well-positioned to gain market share in the Human Capital Management space.
• Thomas Weisel believes McAfee Inc (NYSE: MFE) will benefit from PC market growth, enhanced awareness of the company's brand, and its renewed focus on product development for the midmarket corporate segment, and started shares with a Market Weight rating and $37 target.

• Lululemon Athletica (NASDAQ: LULU) was started at William Blair with an Outperform rating and at UBS with a Neutral rating and $37 target.
• Merrill Lynch initiated shares of Zoltek Companies Inc (NASDAQ: ZOLT) with a Buy rating and $50 target.
• Bear Stearns started shares of Capital Product Partners (NASDAQ: CPLP) with a Peer Perform rating.
• Oppenheimer initiated shares of BFC Financial (NYSE: BFF) with a Buy rating and $3.50 target.

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Carbon fiber manufacturer Zoltek Companies Inc. (NASDAQ: ZOLT) can no longer be considered a startup, as evidenced by the company's recent decision to sell 4,000,000 shares of stock to the general public at $38.76 per share. Some of these shares originally belonged to senior management who now have the right to sell the shares and collect their due after years of nurturing the company into profitability. The stock closed Tuesday at $37.60, down $2.15, but Zoltek makes much in-demand products like carbon fibers and other technical fibers, which are essential components in various technology components. The market will very soon catch up to the sale price. Tech investors will want to take a look at Zoltek in the near future.

The company reported third quarter 2007 on Aug 6. Net sales increased 50% to $40.3 million. Operating income was up 72% to $6.7 million and net income was $5 million or $0.17 per diluted share. This is certainly an improvement over a $21 million loss in 3Q 2006.

Zoltek is turning an important corner in which income from continuing operations no longer must be plowed straight back into expanding the business. Zoltek has grown its production capacity significantly, and recently signed a five-year , $142 million contract with a Spanish firm to provide carbon fibers for wind turbine generators. The company has reduced its long-term debt significantly, but has increased its short-term debt by a similar amount. Investors who enjoy a ride now and then may find Zoltek's public stock offering of interest.

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In my book about Baby Boomer investing I highlight what I feel are the five major growth industries going forward. The industries are health care, alternative energy, technology, communications and lifestyle. I also mention 42 companies within those industries that could be the leaders, the game changers. Since the book has been published, five of the 42 stocks I wrote about are being acquired!

The latest one to go is Checkfree (NASDAQ: CKFR). Fiserve (NASDAQ: FISV) has announced its $4.4 billion bid. Checkfree made our banking-transactional life much easier. The other four that will be part of larger companies are Opsware (NASDAQ: OPSW), Color Kinetics (NASDAQ: CLRK), aQuantive (NASDAQ: AQNT) and Kyphon (NASDAQ: KYPH). Other than aQuantive, the other three were also part of my Top 25 stocks for the NEXT 25 years series.

As the 42 companies are down to 37, it causes some reflection for the future. Great, emerging companies will always be on the radar screen of larger, well-financed suitors. If growth cannot be internally generated through research and development efforts, larger companies will need to acquire growth and next generation products or technology. With interest rates still historically low, the borrowing necessary to buy these young, up-and-comers is not a significant issue. Investors will reward mature companies if they acquire intelligently and strategically.

Other stocks that have run significantly are Chipotle (NYSE: CMG) and Zoltek (NASDAQ: ZOLT). Back in Decemeber, Chipotle was barely $40 and is now at $99 -- this one will not get bought out. The current P/E ratio is too high, so any buyer would have to absorb huge dilution to their own current earnings -- investors do not like that!Zoltek, was $19 then and now trades at $46. Several investors I speak with seriously feel Zoltek, now at a $1.35 billion market capitalization, could be a $10-12 billion market cap company. Zoltek is also another top 25 stock for the NEXT 25 years.

I believe at least 20-25 of the 42 will be acquired before the decade is finished. That's the nature of capitalism.

I will replace the three names for the Top 25 stocks for the NEXT 25 years before the weekend, but I am not ready to write a new book!

The book Baby Boomer Investing ... Where do we go from here?, released In December 2006, is also about the past 30 years and the incredible accomplishments achieved in technology, health care and life style as well as companies that changed and improved our lives. More importantly, at least I think so, I write about where I think our generation is going from here in terms of investing. There are 78 million of us Baby Boomers and the challenges we face in the next 20+ years are huge.

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MAJOR PAPERS:

• General Electric Company (NYSE: GE) has hired Morgan Stanley (NYSE: MS) to find a buyer for its WMC Mortgage subprime mortgage unit, signaling its exit from the mortgage business, reported the Wall Street Journal (subscription required).
  
• GE's CNBC cable business news channel and the Financial Times Group are in discussions to share resources and shore up their Web business, reported the Wall Street Journal.
• VeriSign Inc (NASDAQ: VRSN), which oversees dot-com and dot-net domain names registry, has recorded an additional $160M in compensation expenses related to stock option grants made between 1998 and 2006, causing the CFO to resign, reported the Wall Street Journal.
• The Financial Times (subscription required) reported that Virgin Media Inc (NASDAQ: VMED) has hired financial services company UBS AG (NYSE: UBS) yesterday to pursue strategic buyers.

• From BusinessWeek's "Inside Wall Street" column:
  
• Investors are paying attention to Arbitron Inc (NYSE: ARB), the media research company that compiles radio ratings.
  
• Ziopharm Oncology (NASDAQ: ZIOP) is testing the use of ZIO-101 arsenic [organic] to treat myeloma and other blood cancers.
• Zoltek Companies Inc's (NASDAQ: ZOLT) carbon fiber used in wind turbines is in-demand, as windmill demand soars as an alternative energy source.

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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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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.

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"At first glance, the upcoming Airbus A380 and the Boeing 787 Dreamliner planes look much like existing commercial models - but nothing could be further from the truth," says energy and resource industry expert Elliott Gue.

In Personal Finance, the editor notes, "Both are 20% to 30% more fuel efficient than any planes currently flying, due largely to lightweight composite materials."

Composites, he notes, are formed from two dissimilar materials -- usually a reinforcing fiber and an adhesive epoxy or resin, with carbon-fiber composite being the most commonly used in aircraft construction.

And it's not just airplanes that use these advanced materials; Gue observes, "Wind-power blades, oil rigs and sporting equipment all use high-strength, space-age materials. That spells soaring demand and solid growth for a handful of companies involved in their manufacture."

For those looking to invest in the "composite" industry, the advisor offers a trio of ideas. First is Hexcel (NYSE: HXL), the world's largest producer of "prepregs" for the aerospace industry. Prepregs, he explains, are woven carbon-fiber sheets that when chilled remain flexible and can be bent to shape or pressed into molds.

Gue says, "Outside aerospace, the wind power industry is fast becoming Hexcel's most important source of revenues. In fact, wind power is the company's fastest-growing major source of revenue; Hexcel projects at least mid-teens growth from that line this year.

Gue's second composite play is Zoltek (NSDQ: ZOLT), which he notes is the global loeader in raw carbon-fiber materials. The company, he notes, has two carbon-fiber factories, one located in Texas, the other near Budapest, Hungary.

Like Hexcel, Zoltek sells to the aerospace field, but it now increasing its focus on the wind power market. Gue notes, "Zoltek already supplies two of the world's top wind-power plant manufacturers, Denmark's Vestas Wind and Spain's Gamesa."

The third composite play is Allegheny Technologies (NYSE: ATI) derives close to 70% of its revenues from high value-added metal materials such as titanium, nickel and tungsten-based alloys.

Gue explains, "Like carbon-fiber composites, titanium-based alloys are also becoming more important components in commercial airliners, supplanting traditional steel and aluminum. Titanium weighs about 50% less than steel but is equivalent in strength and more heat-resistant."

He points out that the Airbus A320 and Boeing 737 each contained around 25,000 pounds of titanium. Future growth markets, he notes will come in expanding the use of its alloys to oil drill bits and specialty metals used in the manufacture of nuclear reactors.

For more stock picks from the leading financial newsletter advisors, visit Steven Halpern's free daily website, TheStockAdvisors.com.

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