Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next
Author: bootchk Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 361  
Subject: sharing my dd Date: 8/7/2000 8:24 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 6
This post shares some of my due diligence, done today. I don't own KEM yet.

I searched Google and used Yahoo Finance and Value Line.

Also did an NAIC Stock Selection Guide Analysis
which shows that the buy range is 26-65 ! (Use whatever low price you want,
it really does not make much difference if KEM is going to make 6$ a share in 2005 as projected
and the high annual PE stays at 24.)

Story in trade magazine giving good background about current situation, recent history, and competitors.

<http://www.ebnews.com/story/OEG20000131S0043>

An article on MSN about the 3 capacitor stocks.

<http://moneycentral.msn.com/articles/invest/company/5388.asp>

I started out looking it as a value play (oversold, undervalued) but I also did a mini-rule maker analysis. Now I think the company is good and growth should continue.

1. Gross margins 31% !> 50%
2. Net margins 20% > 10 %
3. Sales growth 67% > 20%
4. EPS growth 252% > 25% (or use 18% demand growth or 30% tantalum demand growth)
5. Cash/debt 2 !> 3
6. Flowie 1.32 !< 1.25 (recently, worse earlier)
7. Positive cash flow ops Yes
8. Strong historical perf 20% APR price growth over last 5 years.

You can see it misses on 3 counts. But not by much. It won't take long to pay off their debt. I am not convinced that a commodity manufacturer can do better on the flowie.

If you read their annual report, you will be convinced they are making the rules. They seem to be making the right kind of capacitor, with the right capacity (manufacturing that is), at the right time.

Also leading PEG = 27/3/ 20% sales growth < .5

Also note that their operating and net margins are improving. But they have never been bad except when during the Asian crisis.

One worry is that insiders (Citigroup and others?) still own 29% and seem to be gradually letting themselves out. I think this can be rationalized as 'the way the venture capital system works.'
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement