Carbon Fiber

The Dynamic Wealth Report
April 9, 2007

It's The Little Things

I love to read.  No surprise here, and my topic of choice is typically business or finance related.  I’m sure you are cut from the same cloth, also finding a high level of interest in the various newspapers, magazines, and blogs out there focused on the financial world (otherwise you probably wouldn’t be reading this!)  An interesting article caught my eye in Forbes this last week.  In their technology section, they had an article focused on the development of the aviation market.    

This article talked about a small company, Adam Aircraft in Colorado, who started in the aviation business almost a decade ago.  They focus on building low cost, high performance small planes – planes that fall squarely in the “very light jet” category.  After many years of work, their plane received FAA certification and they have now built and shipped 7 and have another 70 orders in backlog.   Its a great story about American ingenuity, the use of new technology, and a push to start a new industry. 

These small airplanes are expected to start a tidal wave of movement in the “Air Taxi Industry.”  Eventually, as those who believe in the industry say, we will be able to hail a jet to take us to the nearest city, much like we hail a cab to transport us to our restaurant of choice.  At a purchase price of $2.25 million per plane, I will be interested to see when that market develops. 

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However, as interesting as this article and the company was, what peaked my interest was something I almost overlooked, it was “the little thing.”  What was that little thing?   It was the mention of a new type of material, carbon fiber.  Why is this interesting?  Why did the light bulb click on in my mind?  Carbon fiber is a carbon composite material that is much stronger and lighter than aluminum and steel, and now interchangeable with the two! 

Also, interestingly enough, the article notes that Boeings 787 Dreamliner jet which is scheduled for delivery in 2008, is made mostly out of carbon fiber – which is also cutting down on fuel expenses – not a bad idea in today’s high cost energy environment. 

So this little mention of carbon fiber peaked my interest.  The note that Boeing was using it on the new 787 Dreamliner gave me a good idea about its importance, and with a little research I discovered that  the Airbus A-380 is also planning on using substantial amounts of carbon fiber.  So this advanced technology is going to make airline manufacturers more profitable by providing advanced fuel efficient airplanes. 

Now, lets go one step further, who is going to benefit from this change? Well a little more research and we discovered that the carbon fiber market is a very small one.  There are only a handful of manufacturers, including three that are public – Zoltek Companies (ZOLT), Hexcel Corporation (HXL), and Toray Industries, Inc (Japan).  There, I believe, may be the opportunity to benefit!  

It’s the little things!

•  Industrial Metals and Minerals (15.2% in one month!)

Metals and minerals industry stocks continued their steady march upward, recording a more than 15% gain!  The rocket ship behind this upward drive is nothing too unusual, commodity prices continue to trend upward with uranium, copper, gold, and silver all moving higher!

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