Acme United and Swine Flu
You may wonder what Acme United (ACU – $8.00), a ruler and scissors company, has to do with swine flu? Well, Acme United has a division called PhysiciansCare, which offers a wide assortment of first aid kits, over-the-counter medicines, emergency and disaster kits, preparedness products and kit refills. One particular product being sold by PhysiciansCare, are N95 respirators, which are the typical masks being worn by thousands of people in Mexico to protect them against swine flu.
Acme’s first aid products have a great customer base in the U.S., as they are sold at Staples, Office Depot, United Stationers, Office Max, Corporate Express and many more. This means, if demand for a certain product goes up, Acme is at the forefront to supply that item.
With swine flu spreading all across the United States, Acme is in a good position to receive a large number of orders for N95 masks. This is part of the reason why the stock went up almost 10% in the past week.
Acme’s masks are made to NIOSH standards. NIOSH stands for National Institute for Occupational Safety and Health, and is the United States federal agency responsible for conducting research and making recommendations for the prevention of work-related injury and illness. NIOSH is part of the Centers for Disease Control and Prevention (CDC) within the US Department of Health and Human Services.
I believe Acme United has a fair chance to receive a number of substantial orders for N95 respirators. These are products that are in high demand and are used as first line of defense against swine flu.
Additionally, if swine flu continues to spread, demand for other Acme products like hand sanitizers and latex gloves will also increase considerably. At these prices, ACU remains a buy with a price target of $11.85.
We will soon publish an update report on Acme United.
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