| | | Kemet (KEM). In for a few shares.
My very limited understanding of the situation: KEM manufactures multi-layer ceramic capacitors. There's a global shortage of these now. These components are used in many electronic devices. Go Pro is an example of a company that says it can't manufacture enough Go Pros because of such a shortage. Apparently some companies have gone to KEM asking for more product, asking for increasing production. KEM maybe/apparently has said, this is a volatile business with demand rising then falling. We don't want to increase productive capacity because that's a big risk for us, i.e. being saddled with more debt and maybe idle equipment, if/when the bad times come again. There are now three companies have come forward and said, ok, we'll fund you, interest free (ed. not sure for how long), if you will install the necessary equipment to make these suckers, and give us first dibs on the volume increases.
Therein lies a possible margin of safety for KEM (and KEM shareholders)
Have no idea when production will ramp up. Right now, I'm prepared to hold my few shares 12-18 months to see if there's more positive news and/or increase in KEM's stock price.
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