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In our continuing series of earnings preview, Andrew Hall and Ben Nye take a look at Cabot Microelectronics (CCMP). The company is a niche business and, in our view has a wide economic moat that is demonstrated by the robust gross margin performance and market share. The nature of the slurry business \u2013 a formula that smooths computer chips as they are manufactured \u2013 means that the company\u2019s revenue results tend to be highly correlated with industry semiconductor wafer starts.

Given the strength in a number of CCMP\u2019s industry earnings reports (e.g. INTC, KLAC, LRCX, MU), the emergence of 3D NAND and Finfet technologies, and lack of sell-side attention, we think the company is well-positioned heading into its earnings report.

This earnings preview is a part of our Q3 earnings preview series. Please send us a message on Twitter @tuskmediallc if you would like to request an earnings preview and we can do our best to accommodate. You can also check out our previous videos on Seeking Alpha and YouTube.

Please note that this is a very thinly traded stock. We have added to the position in the last 48 hours, we have been buyers of the stock for at least the last two months, and we may add to or sell some or all of the position in the future. We discuss the stock with no assurance that we are correct. We cite data that we believe to be accurate but we cannot guarantee its accuracy.