Lighting is one of those areas in our lives that we often take for granted. We hardly think about how important having a well-lit place can be until we find ourselves in the dark, nor do investors think about these companies on a frequent basis either. However, this could be a mistake if you take a closer look of Acuity Brands (AYI – Snapshot Report), a leader in innovative lighting systems.
This Georgia-based company might not be a household name, but it has a variety of lighting solutions and particularly in the LED market. While this might not sound like the sexiest place for investors to go, the stock has actually been a star performer and it has gained over 41% in the past year, so clearly it is on the right track.
But with these kind of gains in a difficult market, investors need to be extra careful to make sure that the fundamentals also lineup as well. Fortunately for AYI, there is plenty of promise if we look to recent estimates and some of their stats on the momentum front too.
Over the past two months, we haven’t seen any analyst earnings estimates go lower for the current quarter or full year, helping to push the consensus earnings estimate sharply higher over the past two months. Current earnings expectations have actually surged by 5.35% in the past sixty days for the current quarter, while the full year estimate has moved higher by over 8.1% in the same time frame. Clearly, there is strong potential for AYI to continue growing its business in the near term.
AYI also has a great history when it comes to earnings season, as it hasn’t missed since mid-2014. This shows that the company does a great job of living up to lofty expectations, and that it is always one to watch when giving its quarterly updates.
And while shares have run up nicely in the past few months, investors should note that the stock has actually earned itself a momentum score of ‘A’, putting it into the top 20% from this regard. In fact, its 52 week price change of over 40% destroys the industry average – which comes in at a near 50 percent loss instead—showing that AYI is in a class of its own.
Given the stats above, it shouldn’t be a surprise to note that we currently have a Zacks Rank #1 (Strong Buy) on Acuity Brands and are looking for more outperformance from the stock in the months ahead. So, although this might not be the more interesting industry at first glance, the company’s recent performance and strong position in the industry should definitely grab your attention, making this a definite stock to put on your radar screen this summer.
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