8 Reasons Aceto Is Worth A Look As It Pulls Back To $8

| About: Aceto Corporation (ACET)

It has been a tough week and Friday in the market. On the bright side, for those investors who have dry powder, there some better bargains out there than just a few trading sessions ago. One stock has caught my eye has been hit hard this week, but looks like a long term bargain.

Aceto Corporation (NASDAQ:ACET)

8 reasons Aceto is undervalued at $8 a share:

  • Insiders have been significant net buyers of the stock so far in 2012.
  • The five year projected PEG (.71) indicates investors are undervaluing its growth prospects.
  • The stock yields a solid 2.2%.
  • ACET sells at under 9.5 times forward earnings, a solid discount to its five year historical average (13.5).
  • Only two analysts follow the stock, but both have higher price targets than the current price. One has a price target of $10 a share on ACET, the other is at $12 a share.
  • The stock is selling off even as its earnings report on Thursday was pretty solid. Net sales increased 3% to an all-time record, but was slightly under estimates and net income increased to 20 cents a share versus 14 cents in same period last year.
  • Both its Health Sciences and Specialty Chemicals showed 9% to 10% sales growth, it launched two new generics and it has a strong pipeline of new products.
  • Earnings are projected to grow from 47 cents a share in FY2011, to 58 cents in FY2012 and 87 cents in FY2013.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ACET over the next 72 hours.