Camillus, Westcott and Pac-Kit Growth Prospects Trigger Acme United Price Target Increase

The Camillus SK Desert knife

The SK Desert is a mid-sized folding knife and is part of the Camillus Les Stroud signature series.

Acme United (ACU – $10.20) released solid growth numbers for the fourth quarter and full year 2011. The Company managed to increase its net sales with 16%, from $63.1 million in fiscal year 2010 to $73.3 million in 2011. This growth was also reflected in the bottom line. Net income for the year ended December 31, 2011, was $2,811,000, or $.91 per diluted share, compared with $2,573,000, or $.81 per diluted share last year, a 9% increase in net income and a 12% increase in diluted earnings per share.

Camillus knives has received orders from several mass market retailers for its regular line of knives and the Les Stroud signature series. First shipments are commencing this month. Moreover, new products like the Westcott Scissor Mouse and paper trimmers along with the increased distribution of Pac-Kit products to mass market clients are also expected to be big contributors to the growth.

Next to rising revenues and earnings, increased distribution and new product introductions, Acme United’s growth story is also supported by a 7 cents quarterly dividend, which at today’s share price is an annual yield of almost 3%. This is why Acme remains a safe investment, even at uncertain times.

We expect sales to reach $82.5 million in 2012. Taking into account that we expect gross margins and taxes to remain fairly stable, we estimate earnings per share to reach $1.02, or an increase of 12% compared with fiscal year 2011. We reiterate our buy recommendation for Acme United Corp. with a short term price target of $13.71, which is more than 38% above today’s stock price.

Download your copy of the fourth quarter 2011 Acme United Company Report.

Download Advice: BuyPrice Target: $59.86Latest Company Report (pdf)
For important disclosures, please read our disclaimer.

For important disclosures, please read our disclaimer.

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