Acme United Update Report Q1 2009

Acme United SpeedPak

When the blade is dull, you simply push the button on the side, pull the blade out, retract the top button, and it automatically reloads another blade.

In this update report (pdf) we discuss Acme United’s (ACU – $7.42) first quarter results. We explain why we feel this stock is undervalued at current levels and we give an outlook for the near term future. Underneath are a few highlights from the report:

Even in these difficult market circumstances, the Company was able to gain 5 large mass market industrial and hardware customers during the past two quarters.

ACU is fundamentally very sound with a low valuation, as it has a trailing P/E of 6.61, a price to book of 1.09 and 16.88% Return On Equity.

The Company has implemented a number of cost cutting measures, including incentive pay, travel, telecommunications and legal fees, which will result in annualized savings of approximately $1 million. These savings will not affect the development of next generation products.

Acme United will release a large number of new products in the coming months. There’s a whole line of new pencil sharpeners with titanium blades, cutting tools in the Clauss line with titanium carbonitride coated blades and new non-stick cutting implements.

We remain confident in Acme United’s long term future and are therefore adjusting our 12-month price target from $11.85 to $11.64, only to reflect the lower average industry P/E.

Click the “Download” button to read the entire Update Report.

Read more

For important disclosures, please read our disclaimer.

0 comments… add one

Leave a Comment