Thursday, January 25, 2007

Some possibilities for KEM

On a miserable market day with the DJIA -119.21 points (.94%), the S&P 500 -16.23 points(1.13%) and the NASDAQ -32.04 points (1.3%), any stock that holds it's ground is worth a second look. Kemet Corporation (KEM) is one that caught my eye, selling today at 7.56 (up .22) near a 15 month low.

Kemet Corporation, together with its subsidiaries, manufactures tantalum, multilayer ceramic, and solid aluminum capacitors. The company's products are used in various electronic applications and products, including communication systems, data processing equipment, personal computers, cellular phones, automotive electronic systems, military and aerospace systems, and consumer electronics.

KEM just broke above its 50 day moving average with conviction on good volume. Today it reported earnings for Q3 (ending Dec '06), lower than the previous quarter but 31% higher than the same quarter the year before.

Chart shows a price support at around 7, decent book value, low debt, a trailing P/E of 15, good fund ownership, projected increase in earnings thru '08. Average daily volume (50 day) near 846 thousand shares.

I see a chance for a turn around from a 3 month stagnant condition and, over a period of time, continuation of the last 2 day move with some profit taking along the way.

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