Bargains are hard to find since the latest market push. This company has lagged the market behind, and yet, the stock is trading at about 10-times earnings and has the ability to push higher. The economics favor the company and so does the economy. This is a great long term holding.
Acco Brands makes office, school and calendar products, as their main focus, selling their products through commercial resellers and direct to consumers. The company, ACCO, has a market capitalization of $1.4 billion and it stock is trading at $12.80.
The company is a very well established, global brand. This positions the company to continue its earnings. As the world economy moves and expands, this company will do the same.
With the economy expanding as it has been over the course of the past year, and the stock market pushing all-time records, I have been searching diligently to find opportunities in the equity markets. This stock is a unique find. Here are some numbers for the past several years, specifically, this listing shows the total assets and gross revenue, respectively:
2012: $2,473 / $514
2013: $2,346 / $523
2014: $2,183 / $508
2015: $1,928 / $459
Both of these sets of numbers are declining. That in itself is not necessarily a bad thing. Keep in mind that in 2014 the world economies came to almost a screeching halt. This prompted many central banks around the world to take extreme measures to shore up each of their respective economies. So, looking at this initial list I do not necessarily see the declines being bad. Instead, what I am looking at is the assets/revenue ratio. That number is increasing from 21 to 23. This means that although overall assets are declining due to the slower economy, the company’s ability to create more revenue is improving. To me, that is a good sign of a company.
ACCO’s earnings-per-share is also increasing after the decline, as this listing shows:
Earnings have seen a dip, but have maintained a balance. At the same time, keep in mind the economy is expanding. These earnings are from an economic time when there was a general slowing in the United States and worldwide. Now, my expectation is that as the economy continues to mend so will the earnings. And, along with the earnings, this company is in a position to increase its total assets. If you combine the economy potential with how this company performs in any environment, there is a lot of potential.
But, one of the things that I really like about this company is that earnings are already looking to come in above $1.00 for the year of 2016. At the same time, the stock is trading at $12.80. That means that the stock is just slightly above the 10-times earnings that I am usually looking for. With the recent stock moves, especially after the Trump election, the earnings-per-share has been pushed all the way up above 25. Any stock that you buy you are essentially buying at a ratio that puts your earnings potential below 4%, whereas ACCO gives you about a 9% return. Bargains are getting harder and harder to locate. But, ACCO is something you can pick up right now.
With the overall earnings outlook for an established company such as ACCO, and the economy moving forward with a lot of potential, the company, and by extension, the stock is positioned to move upward at a better-than-average move. A lot of traders have overlooked this stock as it lacks name brand popularity. However, traders are going to want to find bargains in the markets, and very likely this stock will be pushed upward to a minimum of the 15-times earnings average that has been in the market for so many years. That would put this stock at roughly $19.00 per share, a good 50% move. ACCO deserves to be in your portfolio.
|This media report from Macroaxis distributed on February 2, 2017 was a factor to the next trading day price appreciation.The overall trading delta against the next closing price was 1.38% . The overall trading delta when the story was published against the current closing price is 16.92% .|