Acme United: Significant Price Target Increase After Record Financials

Acme United (US: ACU – $27.15) is a leading consumer products company with a focus on first aid and safety products, as well as cutting solutions, for commercial and industrial markets worldwide. The Company reached net sales of $43.3 million in the third quarter ended September 30, 2020, compared to $37.0 million for the same period of 2019, a solid increase of 17%.

Net income for the three months ended September 30, 2020 was $1.57 million, or $0.46 per diluted share, compared to $1.05 million, or $0.30 per diluted share, for the comparable period in 2019, an astonishing increases of 49% and 53%, respectively.

As in the first half of the year, Acme’s third quarter results benefited from market share gains in several areas, such as first aid and safety supplies, Westcott craft cutting products, Camillus hunting and Cuda fishing products.

Acme United is truly running on all cylinders. The Company is achieving strong growth quarter after quarter and year after year, while many of its competitors are crumbling. It is doing so by being bold during these exceptional times.

While competitors are cutting back on advertising, cutting back on new product development, and firing people, Acme is doing the exact opposite. It is putting more money into online advertising, it has intensified product development, and is adding staff.

In short, the Company is executing its growth plan by aggressively seeking new business, while managing new and continuing problems related to the COVID-19 pandemic.

The Company gave no guidance, but knowing that in the first nine months of 2020 it achieved earnings per share (EPS) of $1.75, and also knowing that it reached EPS of $.28 in the fourth quarter last year, it is very realistic that Acme United will realize total fiscal year 2020 EPS of $2.10. This is an increase of more than 30% compared to 2019 earnings per share of $1.60.

We reiterate our buy recommendation for Acme United Corp. with a price target of $46.95, which is 73% above today’s stock price.

Smallcaps.us Advice: Buy	Price Target: $59.86	Latest Company Report (pdf)
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