Acme Is in a League of Its Own
Saj Karsan submits:
On Friday, Acme United (ACU) reported year-end results. While its customer markets are still soft, Acme was able to grow revenues by expanding its product lines and customer base. While many companies do this by slashing prices resulting in reduced margins and profitability, Acme has proven itself to be a superior company, maintaining strong profitability as it grows.
You wouldn’t know it from looking at Acme’s stock price, however. The company trades with a P/E of just 11, despite excellent returns on equity. To see the company’s valuation in perspective, consider the P/E ratios of the following companies with similar returns on equity over the last five years:
Investing, Long Term Investment, stock market | admin March 1, 2010
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