Acx Accentuates The Positive

What ACX Technologies (ACX) did was bold, if unusual: It took a special charge of $70 million, or $2.84 a share, in the first quarter on the aluminum division it wants to sell to a yet-to-be-determined buyer. Instead of hurting the shares, the news drove them up, from 17 to 20 3/4 in a few days.


Steve Braverman, a general partner at Redwood Asset Management, explains that the early write-off demonstrates that ACX management has come close to finding a buyer for the aluminum unit. That clears the way, he says, for ACX to focus on its two fast-growing, money-making divisions: Graphic Packaging, which makes paperboard, folding carton, and flexible packaging products, and Coors Ceramics, a producer of advanced ceramic products for structural and electronic applications. And Golden Aluminum makes thin-strip aluminum sheets used for can ends or lids, tabs, and bodies for aluminum beverage and food cans. Unloading this unit positions ACX, spun off by Adolph Coors in 1992, as a growth stock, says Braverman, who sees the stock hitting 30 in six months.

Goldman Sachs analyst Cornelius Thornton was quick to raise his earnings estimates after ACX took the first-quarter charge. He upped his 1996 figure from $1 to $1.40 a share, and his 1997 estimate from $1.30 to $1.70. ACX's long-term outlook has improved substantially, he says.

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