After spending much of the past six months bouncing between a three- and five-star rank, KMG Chemicals (Nasdaq: KMGB) has impressed enough top-performing members of our 165,000-strong Motley Fool CAPS community to finally settle down at five stars. A total of 292 members have given their opinion on the specialty chemicals maker, with many of them offering analysis and commentary explaining the recent optimism.

Following up a big jump in fiscal second-quarter earnings, KMG recently reported another quarter of increasing earnings and sales in the third fiscal quarter with help from its electronic chemicals business. KMG has been expanding its product line in its smaller animal health segment, and many CAPS members like KMG's exposure to multiple industries, but the electronic chemicals segment remains its bread and butter. The segment is now its largest after its acquisition of General Chemical's electronic chemicals business, and holds the dominant market share in North America over competitors such as Honeywell (NYSE: HON). Honeywell itself saw strong improvement in its electronic chemicals business in its first quarter, so it's no surprise the performance for KMG has been strong as well as the semiconductor industry has been on fire. The good times should continue for some time, as its largest customer Intel (Nasdaq: INTC) recently said it expects major sales growth over the next few years. Strong outlooks from major chip makers Texas Instruments (NYSE: TXN) and Broadcom (Nasdaq: BRCM) also suggest continuing strength in semiconductors, playing into the sweet spot of KMG's business.                            

While railroads like Norfolk Southern (NYSE: NSC) and Union Pacific (NYSE: UNP) have seen a big jump in recent quarterly earnings, KMG's wood treating chemicals segment -- which is the major supplier for railroad crosstie preservative in the U.S. -- has cooled off compared to last year, when railroad tie purchases were hovering around the top of their historic range. But KMG expects the continued strength in its electronic chemicals business to offset the weakness in other areas and help it produce record results for this fiscal year, a tune that many CAPS members like to hear.

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Fool contributor Dave Mock owns shares of Intel, which is an Inside Value choice. The Fool has created a covered strangle position on Intel. Motley Fool Options has recommended buying calls on Intel. The Fool has a disclosure policy that you can read anytime, day or night.