Product Introductions And Increased Distribution Produce Record Results For Acme United

Acme United (ACU – $14.24) had a very strong first half of the year with all-time record earnings in the second quarter. This is especially nice because it was achieved in a soft office market where retailers saw their sales decrease by 3 to 6 percent. Additionally, all of the Company’s brands grew and contributed to these solid results.

Looking ahead, the second half of 2013 looks to be very promising as well because many new products are set to enter stores. The Westcott ‘X-Ray’ scissors, for example, will be available chain wide in a number of retailers very shortly, as well as in Europe. Also about 25 new Camillus knives will hit the shelves. Moreover, the first sales of two new lines of gardening tools branded ‘Scotts’ and ‘Miracle-Gro’ may be recorded in the fourth quarter.

Acme United seems to be on track to meet its sales and earnings estimates for 2013. Therefore, we’ll use the average of the Company’s sales and earnings projections in our valuation. As a result, our estimates for fiscal year 2013 are revenues of $92.5 million and earnings of $1.225 per share, or approximately $3.89 million, both up about 9.6% compared with 2012.

Based on these calculations, we reiterate our buy recommendation for Acme United Corp. with a price target of $21.09, which is almost 50% above today’s stock price.

Download your copy of the second quarter 2013 Acme United Company Report.

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

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