What Took Them So Long?

It feels good to be one step ahead of the "experts".
This is an article I read today about Kemet Corp.:

RESEARCH ALERT-Lehman upgrades Kemet to overweight Thu Mar 8, 2007 9:47 AM ET
March 8 (Reuters) -
KEMET CORP.
Current Prior Rating Overweight Equal weight
Lehman Brothers said the beaten down stock of Kemet represents one of the best values in its coverage universe.
If the company successfully integrates the pending acquisition of Evox Rifa Group , it could post earnings of 70 cents a share or higher a year from now, Lehman said in a research note.
Investors tend to view the maker of passive electronic components as a short-term trading vehicle rather than a buy and hold stock, the brokerage, which has a price target of $11 on Kemet, said.
The shares were up almost 4.5 percent at $8.16 in early morning trade on the New York Stock Exchange. (Reporting by Sreerupa Mitra in Bangalore)

Stock Picks Update

For the past two weeks or so, we have seen very possitive markets. One thing that concerns me as an investor is a run-up in stock prices over a short period of time. Depending on each individual's "comfort level", this may be a good time to take some profits.

Here's a recap of the securities mentioned in this blog and previous emails:

Brigham Exploration Co. (BEXP): On 3/28/06 at 9.20, today at 6.16, down 33.04%. I'm staying with it, too late to cut losses.

M I Homes Inc. (MHO): On 8/7/06 at 35.04, today at 37.21, up 6.19%. Broke above the 50 and 200 day moving averages, looking good at this time.

Simpson Mfg. Co. Inc. (SSD): On 9/20/06 at 27.07, trading today at 35.20, up 1.58. A gain of 30.03% in just over 4 months. Cautiously content with the results, may take some profits.

A S V Inc. (ASVI): On 10/19/06 at 16.60, today at 17.06, up 2.77%. Hanging in there, no action.

Smith A O Corp. (AOS): On 12/7/06 at 36.06, today at 39.03, up 8.24%. Staying with the long position.

Kemet Corp. (KEM): On 1/25/07 at 7.56, today at 7.79, up 3.04%. Still looks good, price at a 3 month high after setting a nice base. May add to the holdings.

It has been a very exciting time for the investment community. As we all know, unforeseen events and profit taking could erase the smiles off our faces and turn them into tears, along with the sudden disappearance of any "paper gains". I don't see anything wrong with cashing in profits when everyone else thinks the markets are on an endless ride up... nothing rises forever.

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.