GrafTech International: Strong Postion in Oligopolistic Industry

Our NY presenter recommended GrafTech International (NYSE: GTI, $13.15). This producer of graphite electrodes has the leading share in an industry, where top 5 players command 65% of the market. GTI has the strongest manufacturing network of all competitors with only one other player having true global presence. The company has locked in supply of needle coke, the raw material essential in manufacturing of GE's. As demand recovers, GrafTech should be able to return to pre-crisis operating rate levels. Leverage in the business model will translate into significant incremental EBIT. The upside is 50%+. The company has paid down debt and has liquidity available to finance expansion.