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Why Investors Expect Aceto Corp. (ACET) to Sustain its Scorching Profit Growth

An 83% annual jump in quarterly revenue is extraordinary. This is what a small capital corporation from Lake Success, NY has recently reported. Stock investors may well ask whether such a rate of profit growth is sustainable.

There are two reassuring features of the pleasantly surprising results this company has announced for the Most Recent Quarter ended March 31st. Firstly, there has been even progress in all the revenue divisions of the company. Health sciences, coloring agents, and farm chemicals have all contributed to the profit growth. It is significant that this U.S. company has strong and balanced presences all over the world. Most of its sourcing is from the cost-competitive region of Asia.

A second strength that is particularly valuable for stock investors is the management focus on profitability in priority over market share. The 83% quarterly profit growth comes from a top line growth of just 30%. It is reasonable to conclude that product-mix improvements and customer value deliveries are on the rise in this corporation.

The stock price has risen to $8.04 by the beginning of the third week of May 2008, from a 52-week low of $5.79. The 52-week high is $9.82. The stock has consistently enjoyed a better Price to Earnings Ratio compared to the average for the Chemicals Manufacturing Industry over the past five years. The stock has been at less than 21 in this respect over the past four quarters.

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