Acuity Story

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Acuity Brands is scheduled to announce its earnings tomorrow. The upcoming quarterly report is expected on the 8th of October 2020. As some millenniums are still trying to avoid industrials space, I will try to concentrate on Acuity Brands a little further in order to understand its potential as a viable investment. We will cover the possibilities of Acuity Brands recovering given the current economic outlook.
Published over two weeks ago
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Should you continue to hold Acuity Brands (NYSE:AYI) based on the current analyst consensus?
On a scale of 0 to 100, Acuity Brands holds a performance score of 13. The firm shows a Beta (market volatility) of 0.2939, which signifies not very significant fluctuations relative to the market. Let's try to break down what Acuity's beta means in this case. As returns on the market increase, Acuity Brands returns are expected to increase less than the market. However, during the bear market, the loss on holding Acuity Brands will be expected to be smaller as well. Although it is vital to follow Acuity Brands historical returns, it is good to be conservative about what you can do with the information regarding equity current trending patterns. The philosophy towards foreseeing future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. By analyzing Acuity Brands technical indicators, you can presently evaluate if the expected return of 0.42% will be sustainable into the future. Please makes use of Acuity Brands value at risk, as well as the relationship between the skewness and day median price to make a quick decision on whether Acuity Brands price patterns will revert.
What is the right price you would pay to acquire a share of Acuity Brands? For most investors, it would be the price that gives them a wide margin of safety to have minimal downside risk. In other words, most investors are always looking for undervalued stocks. Even if the future performance is not entirely as expected, the loss of holding it is minimized, and the downside risk is negated. Please read more on our stock advisor page.

What is happening with Acuity Brands this year

Annual and quarterly reports issued by Acuity Brands are formal financial statements that are published yearly and quarterly and sent to Acuity stockholders. The reports show and break down the current year's ongoing operations and discuss plans for the upcoming year. Annual reports have been a requirement from the Securities and Exchange Commission (SEC) for businesses owned by the public since 1934. Companies such as Acuity Brands often view their annual report as an effective marketing tool to disseminate their perspective on company future earnings or innovations. With this in mind, many companies devote large sums of money to making their reports attractive and informative. In such instances, the annual report becomes a forum through which a company can communicate to the general public any number of topics that may or may not be directly related to the actual data published in the reports.

How Acuity utilizes its cash?

To perform a cash flow analysis of Acuity Brands, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Acuity Brands is receiving and how much cash it distributes out in a given period. The Acuity Brands cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Acuity Brands Net Cash Flow from Operations is most likely to increase significantly in the upcoming years. The last year's value of Net Cash Flow from Operations was reported at 568.9 Million

Acquisition by Neil Ashe of 52200 shares of Acuity Brands subject to Rule 16b-3

Legal trades by Acuity Brands insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Acuity insider trading alert for grant of non-qualified stock option (price target 3) by Neil Ashe, President & CEO, on 19th of September 2020. This event was filed by Acuity Brands Inc with SEC on 2020-09-03. Statement of changes in beneficial ownership - SEC Form 4. Neil Ashe currently serves as president, chief executive officer, director of Acuity Brands [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Detailed Perspective On Acuity Brands

Earning per share calculations of the firm is based on official Zacks consensus of 5 analysts regarding Acuity Brands' future annual earnings. Given the historical accuracy of 97.69%, the future earnings per share of the company is estimated to be 7.078 with the lowest and highest values of 6.9 and 7.29, respectively. Please note that this consensus of annual earnings estimates for Acuity Brands is an estimate of EPS before non-recurring items and including employee stock options expenses.

Is Acuity a risky opportunity?

Let's check the volatility. Acuity is looking slightly risky at this time. Whether you invest your money or manage your clients' funds, remember that it is easy to forget that behind Acuity (NYSE:AYI) stock is an actual business venture. So, do not let stock picking become an abstract concept by ignoring the elementary risk calculations. locking in a share of an Acuity Brands stock makes you a part-owner of that company.

Acuity Brands Current Consensus

Here is the current trade recommendation based on an ongoing consensus estimate among financial analysis covering Acuity Brands. The Acuity consensus assessment is calculated by taking the average estimates from all of the analysts covering Acuity Brands

Strong Buy
3
Hold
3
Strong Sell
2
Strong Buy337.5
Buy00.0
Hold337.5
Sell00.0
Strong Sell225.0

Momentum Analysis of Acuity Brands suggests possible reversal in November

Current expected short fall indicator falls down to -1.58. Possible price rise? As of the 7th of October, Acuity Brands shows the Downside Deviation of 1.95, mean deviation of 1.53, and Risk Adjusted Performance of 0.1195. Acuity Brands technical analysis gives you the methodology to make use of historical prices and volume patterns to determine a pattern that approximates the direction of the firm's future prices. Put another way, you can use this information to find out if the firm will indeed mirror its model of historical prices and volume momentum, or the prices will eventually revert. We were able to interpolate and analyze data for nineteen technical drivers for Acuity Brands, which can be compared to its rivals. Please confirm Acuity Brands variance, value at risk, as well as the relationship between the Value At Risk and skewness to decide if Acuity Brands is priced correctly, providing market reflects its regular price of 111.97 per share. Given that Acuity Brands has jensen alpha of 0.1959, we suggest you to validate Acuity Brands's prevailing market performance to make sure the company can sustain itself at a future point.

Our Conclusion on Acuity Brands

While some companies within the electrical equipment & parts industry are still a little expensive, even after the recent corrections, Acuity Brands may offer a potential longer-term growth to stockholders. The inconsistency in the assessment between current Acuity valuation and our trade advice on Acuity Brands is due to the recent market swings and your selection of investing horizon. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Acuity Brands.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Acuity Brands. Please refer to our Terms of Use for any information regarding our disclosure principles.

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