Cabot Microelectronics Corp (CCMP)

This company has underperformed the industry it serves consistently over the past few years. It's bread and butter business (polishing slurries) are becoming increasingly commodity products. It's effort in polishing pads is old, probably seven years, and still has made no impact on revenue. While that segment is higher margin than slurries the reason for that is the pad market is almost completely controlled by one company, Rohm and Haas. My expectation is that either CCMP will never be successful in pads or that margins will fall through the floor when they enter and it becomes a commodity business just like their slurry business.

Additionally, their attempts to put that cash they have on hand to use with acquisitions of new companies has been nothing short of laughable.

Finally, after listening to a few earning conference calls, I believe the CEO might not even be aware of the existence of the market his company is supposed to serve. Ok, that's extreme, I'm sure he knows it exists but he clearly doesn't know a thing about it. Overall week leadership is the final reason I would dump this one.