Acme United’s Stock Price Soars Almost 50% in 2019… More to Come

Acme United Corporation (US: ACU – $20.92) is a worldwide supplier of cutting devices, measuring instruments and first-aid products for school, home, office, industrial and hardware use.

The Company reported net income of $807,000 or $0.24 per diluted share, for its first quarter ended March 31, 2019 versus $764,000, or $0.21 per diluted share, for the comparable period last year. This is an increase of 6% in net income and 14% in diluted earnings per share. A solid performance, and in fact the highest first quarter earnings in the Company’s history.

The major contributor to this result was the cost savings program that Acme United implemented late last year. For example, it let go of a number of people, which reduced personnel expenses by about $700,000 annually. In addition, in-house people replaced third party sales reps. Acme also cut back on print advertising and put more focus on social media, resulting in annual savings of $400,000. All these saving are going straight to the bottom line.

Acme continues to implement new software and production equipment to generate additional savings. Thanks to these cost savings, and a solid sales outlook, the Company is anticipating continued growth in the second and third quarter of this year.

Acme United’s management is providing guidance of approximately $140 to $143 million in sales, net income of $5.0 to $5.3 million and $1.41 to $1.50 earnings per share.

Based on these estimates, we reiterate our buy recommendation for Acme United Corp. with a price target of $30.03, which is 43% above today’s stock price.

Download the first quarter 2019 Acme United Company Report.

 

Smallcaps.us Advice: BuyPrice Target: $30.03Latest Company Report (pdf)
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