Focus Stock of the Month

Once a month we will provide a free analysis of a company from our Amateur Investor Index Top 50 which we feel is a stock to watch.

KEM	2Q 99/98	3Q 99/98	4Q 99/98	1Q 00/99
% Increase in Quarterly Sales Growth	+14%	+35%	+52%	+80%
% Increase in Quarterly Earnings Growth	+200%	+667%%	+800%	+1350%
% Increase in Quarterly Net Profit Margins	2.9%	4.9%	8.5%	14.6%

Estimates for the next two quarters:   2Q 00/99    3Q 00/99
                                                         E .95/.12    E .91/.23
                                                           +692%    +296%

KEM is in the Electronic-Miscellaneous Components Group and is expected to have strong sales and earnings growth the next two quarters. The company is the largest manufacturer of solid tantalum capacitors in the world and the second largest manufacturer of multi-layer ceramic capacitors in the United States. Capacitors store, filter, and regulate electrical energy and current flow and are found in virtually all electronic applications and products. The Company's capacitors are used in a wide variety of electronic applications, including communication systems, data processing equipment, personal computers, automotive electronic systems, and military and aerospace systems. The Company produces leaded capacitors, which are attached to a circuit board using lead wires, and surface-mount capacitors, which are attached directly to the circuit board without lead wires. The Company markets its capacitors to a diverse group of original equipment manufacturers and to a worldwide network of distributors.

EPS: 74 RS: 95 ACC/DIST: B, GROUP STRENGTH: 95, Shares Outstanding: 43.4M, Float Shares 41.6M, Institutional Ownership 93% and Insider Ownership 4%. The average daily volume is around 530,000 shares. Next Earnings Report: 7/19

KEM has continued to see an acceleration of sales and earnings growth the past four quarters along with rising net profit margins. KEM continues to reside in a strong Industry Group and has held up very well during the past market correction. The one year chart of KEM shows that it has now formed a Cup and needs to develop a Handle to form the classic Cup and Handle pattern as described by William O'Neil. This is certainly a stock to watch in the upcoming months due to its strong fundamentals and developing chart pattern,

***The Focus Stock of the Month is our opinion of a company to watch in the future. This doesn't mean it's a recommendation to buy the stock.***