Acuity Brands, Inc. (NYSE:AYI)

CAPS Rating: 2 out of 5

A holding company that owns and manages two businesses that serve two distinctive markets - lighting equipment and specialty products.

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Member Avatar CMFKaizen (88.75) Submitted: 7/5/2015 5:24:25 PM : Underperform Start Price: $187.30 AYI Score: +0.59

Earnings growth is clearly very healthy, and has even been accelerating recently as the company’s efforts to improve internal efficiencies bear fruit, and in part due to higher-margin mix. But revenue growth is rather stagnant, and that will eventually reign in earnings growth unless the company can continue to push up-market and capture higher-margin sales. Management itself is targeting earnings growth at half its current pace.

At Thursday’s closing price of $189.00, the current adjusted (non-GAAP) P/E is 38, giving a 1YPEG of 1.09, suggesting that shares are about fairly valued right now on that metric if the company can maintain (and ideally improve) its earnings growth.

But with a P/E so high, it’ll likely only take one hiccup to cause some significant compression, and that doesn’t seem too far fetched to me given the stagnant revenue growth and cyclical nature of the industry.

Glassdoor ratings are also poor, with only 35% recommending to a friend and 42% approving of the CEO. In general, reviews are critical of management and the company culture.

All in all, it seems like an interesting company that is consolidating a fragmented industry, and there appears to be multiple runways for growth between meaningful international expansion and movement up-market into turn-key solutions and building automation. But both are essentially new frontiers for the company, and therefore carry higher risk. Combined with the unforgiving P/E, stagnant revenue growth, low employee satisfaction, and dependence on cyclical industries, I'm passing on this one at this time.

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Member Avatar TMFTycoon (83.52) Submitted: 3/20/2014 4:00:19 PM : Outperform Start Price: $140.48 AYI Score: +23.04

LED adoption is growing quickly, and Acuity is there to reap the rewards of this. The stock price is already pretty high but I think steady growth over the next couple of years will keep the market's love for Acuity going.

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Member Avatar wtihedge (80.50) Submitted: 2/3/2014 3:12:38 PM : Underperform Start Price: $124.47 AYI Score: -31.69

may take that long for people to wake up and sell

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Member Avatar jbs4radio (72.67) Submitted: 6/16/2009 2:42:33 AM : Outperform Start Price: $26.86 AYI Score: +472.32

PEG = 0.99

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Member Avatar SpaceMonkey01 (31.86) Submitted: 3/22/2009 6:45:11 PM : Underperform Start Price: $20.77 AYI Score: -635.14

StockTA.com screen

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Member Avatar cutepseudonym (84.59) Submitted: 9/6/2008 9:51:00 PM : Outperform Start Price: $40.83 AYI Score: +291.46

Well managed and is positioned to benefit from energy efficiency upgrade trend.

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Member Avatar GTRudeBoy84 (< 20) Submitted: 6/12/2008 8:30:21 AM : Outperform Start Price: $46.56 AYI Score: +242.71

Buy

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Member Avatar gashek2 (< 20) Submitted: 5/23/2008 11:38:31 PM : Outperform Start Price: $47.06 AYI Score: +241.87

This is my first attempt to evaluate a stock. I created a screen based on return on investment, eps growth and brokers' rating. AYI is one of the stocks that the screen returned.

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Member Avatar soundsound (85.41) Submitted: 4/3/2008 9:56:24 AM : Outperform Start Price: $42.88 AYI Score: +278.61

It's a no-brainer. Underated company comes into limelight with great profit statement.

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Member Avatar kaneco (77.62) Submitted: 3/18/2008 1:17:06 PM : Outperform Start Price: $37.99 AYI Score: +328.96

Everyone is using energy effecient light bulbs now.

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Member Avatar robere35 (41.87) Submitted: 2/7/2008 4:18:07 AM : Outperform Start Price: $41.79 AYI Score: +284.13

Agile competitive edge in the market

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Member Avatar ThePessimist (99.26) Submitted: 2/3/2008 3:13:30 PM : Outperform Start Price: $43.79 AYI Score: +272.37

AYI has been beaten down due to the housing slowdown. However, much of their sales is driven by non-residential construction and retrofit activity. Much of their product line is new energy-efficient lighting introduced within the past three years.

In the last economic slowdown a few years back, AYI's business actually increased. Retailers wanted better lighting to improve sales, and all building owners like to reduce operating expenses. Therefore, while it's counterintuitive, AYI can actually be countercyclical thanks to the retrofit business.

With the complexity of their chemicals business now spun-off, and a much more streamlined management structure, they should do well in 2008. The price will recover quickly once people realize that a construction slowdown doesn't mean doom for them.

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Member Avatar lareineivre (94.56) Submitted: 12/30/2007 2:39:33 AM : Outperform Start Price: $41.75 AYI Score: +301.56

Favorable risk / reward profile
for comparative analysis and other stocks with favorable risk / reward profiles, view:

http://f1.grp.yahoofs.com/v1/8EF3R4tbNvpbI1SUgN2s5cv3kn0S2YU_r6vlJpSdVxbkYnCy4Q5V4m6oAmqNU2WnbcnNCzcELTwA2y9D3n-PxA/PRV/PRV%2007.11.30.xls

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Member Avatar godsmacks1 (< 20) Submitted: 12/21/2007 4:40:28 AM : Underperform Start Price: $41.52 AYI Score: -304.34

home furnishings and fixture sector

mortgage problems kills furnishings

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Member Avatar JjcampNR (76.73) Submitted: 12/7/2007 9:54:44 PM : Outperform Start Price: $39.43 AYI Score: +331.22

Lighting market is heating up, possible target for one of the larger conglomerates.

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Member Avatar tisland (< 20) Submitted: 12/2/2007 1:56:13 AM : Outperform Start Price: $37.13 AYI Score: +357.63

industry changes, takeover, going green, corperate forward thinking.

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Member Avatar mreuvecamp (< 20) Submitted: 11/28/2007 1:16:49 PM : Outperform Start Price: $37.37 AYI Score: +352.33

Will see what happens.. lighting is always a must

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Member Avatar indyirish (22.68) Submitted: 11/28/2007 10:20:51 AM : Outperform Start Price: $36.95 AYI Score: +356.94

Play off of Genlyte. Hopes of being bought by Phillips for their lighting tech. Retrofitting old light fixtures to reduce energy

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Member Avatar eXigy (33.72) Submitted: 7/10/2007 1:30:49 AM : Outperform Start Price: $46.92 AYI Score: +255.77

Good RoA and RoE, EPS of $0.88 announcement expected today (looks good with diluted EPS of about 2) and I just personally like companies owned mostly by insiders.

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Member Avatar steveku2 (< 20) Submitted: 4/13/2007 2:30:26 PM : Outperform Start Price: $46.82 AYI Score: +248.82

Wish I'd bought this when i added it to my "stocks to watch" list. Now it's out of my price range. Still got some upside.

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