Thursday, October 4, 2012

Acme Rises With The Tide

One of the oldest stocks on the Stock Ideas page is that of Acme United, a supplier of knives, medical kits and other items to retailers. As the market has risen over the last few months, many stocks have been lifted out of the doldrums. Acme United is the latest, and therefore now makes the move to the Value In Action page.

Not much has really changed in terms of this company's profits or revenues since it was first discussed on this site in 2009. Book value has grown by about 7% per year, while revenue growth has barely kept pace with inflation. But what has changed is the price investors are willing to pay for this company. During part of 2009, shares of ACU were available for just $6. Today, each shares fetches more than $12.

In 2009, of course, most investors were panicking. But value investors were picking up shares for a bargain. The best investments are made precisely when most investors are scared; Acme United is just the latest example.

Disclosure: No position

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