New Lifetime High Today: Acuity Brands (AYI)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Acuity Brands ( AYI) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Acuity Brands as such a stock due to the following factors:

  • AYI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.6 million.
  • AYI has traded 98,856 shares today.
  • AYI is trading at a new lifetime high.

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More details on AYI:

Acuity Brands, Inc. designs, produces, and distributes lighting solutions, components, and services for commercial, institutional, industrial, infrastructure, and residential applications in North America and internationally. The stock currently has a dividend yield of 0.3%. AYI has a PE ratio of 39. Currently there are 8 analysts that rate Acuity Brands a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Acuity Brands has been 336,100 shares per day over the past 30 days. Acuity has a market cap of $7.6 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.79 and a short float of 2.2% with 1.84 days to cover. Shares are up 24.4% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Acuity Brands as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 11.8%. Since the same quarter one year prior, revenues rose by 12.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AYI's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, AYI has a quick ratio of 2.20, which demonstrates the ability of the company to cover short-term liquidity needs.
  • ACUITY BRANDS INC has improved earnings per share by 42.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ACUITY BRANDS INC increased its bottom line by earning $4.05 versus $2.94 in the prior year. This year, the market expects an improvement in earnings ($5.35 versus $4.05).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Electrical Equipment industry average. The net income increased by 41.9% when compared to the same quarter one year prior, rising from $32.70 million to $46.40 million.
  • Net operating cash flow has significantly increased by 105.71% to $28.80 million when compared to the same quarter last year. In addition, ACUITY BRANDS INC has also vastly surpassed the industry average cash flow growth rate of -19.77%.

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