Acme United Continues Strong Online Sales Growth

Acme United Corporation (ACU – $22.20) is a worldwide supplier of cutting devices, measuring instruments and first-aid products for school, home, office, industrial and hardware use.

Acme United achieved record sales for the 7th consecutive year. In fiscal year 2017, ended December 31, 2017, all major product lines of the Company gained market share, while online sales doubled compared to 2016. In fact, Acme’s online sales have grown by 100% annually over the past three years.

Despite overall weakness at many retailers, wholesalers, and superstores, Acme’s revenue continues to grow thanks to impressive online sales growth at Amazon, and also at Jet, which is part of Walmart. The Company has a team working exclusively on online content, reviews, and search optimization. This is paying off. In particular, the first aid area and the Westcott business are performing strong online. The Company’s management is optimistic that this momentum will continue in 2018. Amazon is now the largest customer in the European segment and the third largest in the U.S.

All brands are doing well with plenty of new products being introduced at the most recent shows in the United States and Europe. Paperworld, for example, is one of the highlights of the year for the office and stationary sectors. For Acme United Europe, the show was a big success as the team returned home with plenty of new sales leads and orders. It’s clear that 2018 has started well for the European team, as it continues to build on its path of growth.

In addition, the 40th edition of the SHOT show was a hit for Camillus and DMT with plenty of new orders and sales leads. Both brands are growing strong in the US and Europe, and thanks to the new products introduced at SHOT growth is bound to continue in 2018.

Moreover, thanks to the repatriation of $5.8 million and the Company’s cash flow from operations a new acquisition could happen in 2018.

Based on our outlook and calculations, we reiterate our buy recommendation for Acme United Corp. with a price target of $29.80, which is 34% above today’s stock price.

Download the fourth quarter 2017 Acme United Company Report. Advice: BuyPrice Target: $59.86Latest Company Report (pdf)
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