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ACCO Brands Hits 52-Week High on Raised View, Acquisitions

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Shares of ACCO Brands Corporation (ACCO - Free Report) reached a new 52-week high of $14.00 during its trading session on Dec 16. This apex improved upon the last 52-week high of $13.70 on Dec 15.

Year to date, shares of the company yielded 87.9% return, outperforming the return of 19.6% generated by the Zacks categorized Office Supplies & Forms industry.

Also, the company closed its trading session at $13.40, while the trading volume for the session was 1.12 million shares. Positive earnings estimate revisions for 2016 and 2017 as well as 10% earnings growth rate expectation for the next five years indicate the stock’s potential for further price appreciation.

Growth Drivers

In the last four quarters, ACCO Brands Corporation reported better-than-expected results, with an average positive earnings surprise of 23.93%. In third-quarter 2016, the company benefited from strong back-to-school season in North America and operational efficiency. Earnings of 29 cents per share outpaced the Zacks Consensus Estimate of 28 cents by 3.57%.

For 2016, ACCO Brands Corporation increased its adjusted earnings guidance to 84−86 cents per share, compared with 80−84 cents expected earlier. Free cash flow is projected to be roughly $145 million versus $140 million expected earlier. Sales will likely grow in low single-digits range.

ACCO Brands Corporation is a strong believer in acquiring business units that complement its existing business portfolio as well as enable expansion in new and existing markets. In May 2016, the company completed the acquisition of Pelikan Artline, which contributed revenues of $27.6 million to the company’s ACCO Brands International business segment. In addition, in Oct 2016, the company signed an agreement to acquire Esselte Group Holdings AB for $333 million in cash. It is one of the leading office products company in Europe. The company anticipates 12 cents accretion in earnings in the first 12-months of buyout, while expects 13 cents per share in cost synergies within three years.

Estimate Revisions Show Potency

Over the last 60 days, the Zacks Consensus Estimate for ACCO Brands Corporation grew 3.7% to 85 cents per share for 2016 and by 11.4% to 98 cents per share for 2017. The estimates for 2016 and 2017 represent year-over-year growth of 9.0% and 14.7%, respectively.

ACCO BRANDS CP Price and Consensus

 

ACCO BRANDS CP Price and Consensus | ACCO BRANDS CP Quote

With a market capitalization of $1.4 billion, ACCO Brands Corporation currently sports a Zacks Rank #1 (Strong Buy). Other stocks worth mentioning in the sector include Enersys Inc. (ENS - Free Report) , Broadwind Energy, Inc. (BWEN - Free Report) and Applied Industrial Technologies, Inc. (AIT - Free Report) . While Enersys sports a Zacks Rank #1, both Broadwind Energy and Applied Industrial Technologies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enersys Inc’s earnings estimates for fiscal 2017 improved over the last 60 days. It has an average positive earnings surprise of 3.01% for the trailing four quarters.

Broadwind Energy’s bottom-line expectations for 2016 and 2017 have improved over the past 60 days.

Applied Industrial Technologies’ earnings estimates for fiscal 2017 and fiscal 2018 have been revised upward, over the last 60 days. Average earnings surprise for the last four quarters is a positive 4.93%.

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