A.T. Cross Co. (ATX) is showing solid valuations with good growth rates. If you are willing to stomach the chart, now could be a good time to get in on this Zacks #1 Rank (Strong Buy).
A.T. Cross Co. makes branded personal and business accessories like writing instruments, glasses, leather goods, watches, cufflinks, and stationary.
A Strong Quarter
Back in July the company reported quarterly sales of $47.8 million, which was more than a 14% increase. Margins were about the same as last year.
Net income came in at $3.2 million, up from $2.7 million. That breaks down to $0.26 per share. On top of that, A.T. Cross went ahead and raised its guidance. All in all, a great quarterly report.
Beat the Street, Again
After adjustment the EPS figure was $0.24, 2 cents better than the Zacks Consensus Estimate. A.T. Cross has now beaten Wall Street's expectations in each of the past 9 quarters.
Right now the Zacks Consensus Estimate is calling for $0.69 this year, which is a 40% growth rate. Next year's average estimate is $0.85, good enough for a 23% growth rate.
Shares of ATX can be picked up on the cheap right now. The forward P/E is only 14 times and that puts the PEG ratio at an attractive 0.9. Other value metrics are looking good as well. The price-to-sales is only 0.7 times and the price-to-book is at 1.6 times.
One draw back is that ATX may be a momentum investor's nightmare. But, if you are looking to buy and hold for a while with the ability to weather the storm, this could turn out to be a great entry point in the long run.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service