Ken Majmudar and Sam Namiri of Ridgewood Investments presented their investment thesis on Acme United Corporation (US: ACU) at Best Ideas 2022.

Thesis summary:

Acme United manufactures and supplies cutting, measuring, first aid, sharpening, and safety products to customers globally. Some of its well-known niche brands include Westcott scissors; Clauss cutting tools; Camillus knives; Cuda fishing nets; and first aid and safety brands such as First Aid Only, PhysiciansCare, Spill Magic, and Med-Nap.

Under the current management team led by CEO Walter Johnsen, the company has enjoyed eleven consecutive years of sales growth through 2020 from both organic growth and bolt-on acquisitions, producing corresponding growth in earnings and dividends per share.

The share price is off just over 30% from recent highs, giving new long-term investors an attractive entry point of under 10x earnings and EBITDA, with a long growth runway still ahead.

Over the past ten and twenty years, the stock has generated compounded annual returns, including dividends reinvested, of 15.2% and 13.2% respectively. Ken and Sam believe the company can continue generating similarly attractive absolute returns by extending its astute capital allocation record.

slide presentation audio recording

About the instructors:

Kaushal “Ken” Majmudar, CFA founded Ridgewood Investments in 2002 and serves as its Chief Investment Officer focusing on managing long-term Value Investing based strategies. Ken’s high level experience and work with clients has been recognized and cited on multiple occasions. He is a noted value investor who has written and spoken extensively on the subject of value investing and intelligent investing. Prior to founding Ridgewood Investments in late 2002, Ken worked for seven years on Wall Street as an investment banker at Merrill Lynch and Lehman Brothers where he has extensive experience working on initial public offerings, mergers and acquisitions transactions and other corporate finance advisory work for Fortune 1000 companies. He has been a member of the Value Investors Club – an online members-only group for skilled value investors founded by Joel Greenblatt – where he posted a buy recommendation on Nvidia in 2002 – possibly one of the best long-term investment ideas ever posted on VIC. He has also been a member of SumZero – an online community for professional investors, and written for SeekingAlpha – among others. Ken graduated with honors from the Harvard Law School in 1994 after being an honors graduate of Columbia University in 1991 with a bachelor’s degree in Computer Science. He is admitted to the Bar in NY and NJ, though retired from the practice of law, as well as a member of the CFA Institute and EO (Entrepreneurs Organization).

Sam Namiri is a Portfolio Manager and Analyst at Ridgewood Investments, where he concentrates on managing the Ridgewood Select Value Fund, our fund focused on investing in small and micro-cap companies. Prior to Ridgewood, Sam was an associate at Grand Slam Asset Management, a Small Cap Hedge Fund and also the Founder and President of Shop Network, a jewelry company involved in television, media, manufacturing, distribution and e-commerce. He led the company in producing a reverse-auction television show selling jewelry which aired on DirectTV, started a plant overseas to manufacture semi-precious gemstone jewelry, and developed a global supply chain. Mr. Namiri has a BS in Industrial Engineering and Operations Research from the University of California, Berkeley and an MBA from Columbia Business School.