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Should Value Investors Buy Acme United (ACU) Stock?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Acme United (ACU - Free Report) is a stock many investors are watching right now. ACU is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 11.37, while its industry has an average P/E of 12.53. Over the past 52 weeks, ACU's Forward P/E has been as high as 14.08 and as low as 9.42, with a median of 12.33.

We should also highlight that ACU has a P/B ratio of 1.08. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.34. Within the past 52 weeks, ACU's P/B has been as high as 1.56 and as low as 0.89, with a median of 1.36.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ACU has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.5.

Finally, investors should note that ACU has a P/CF ratio of 7.44. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.66. ACU's P/CF has been as high as 12.08 and as low as 6.28, with a median of 10.72, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Acme United is likely undervalued currently. And when considering the strength of its earnings outlook, ACU sticks out at as one of the market's strongest value stocks.


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