Acuity Brands's average rating is Buy from 7 analysts. Do analysts base this consensus on technical analyses? We know that typical technical analysis utilizes price momentum, patterns, and trends looking at historical prices. It aims to identify signals based on Acuity Brands market sentiment investors' perception of the future value of Acuity. Let us look at a few aspects of Acuity technical analysis.
Using predictive
technical analysis, we can analyze different prices and returns patterns and
diagnose historical swings to determine the real value of Acuity Brands. In general, sophisticated investors focus on analyzing Acuity Brands stock price patterns and their correlations with different microeconomic environment and drivers. They apply predictive analytics to build Acuity Brands's daily price indicators and compare them against related drivers such as
momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional
technical analysis and
fundamental analysis, we attempt to find the most accurate representation of Acuity Brands's intrinsic value. In addition to deriving basic predictive indicators for Acuity Brands, many experienced traders also check how macroeconomic factors affect Acuity Brands price patterns. Please read more on our
technical analysis page or use our predictive modules below to complement your research.
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Acuity Brands' price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Acuity Brands. Your research has to be compared to or analyzed against Acuity Brands' peers to derive any actionable benefits. When done correctly, Acuity Brands' competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Acuity Brands.
How important is Acuity Brands's Liquidity
Acuity Brands
financial leverage refers to using borrowed capital as a funding source to finance Acuity Brands ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Acuity Brands financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Acuity Brands' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Acuity Brands' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Acuity Brands's total debt and its cash.
Acuity Brands Gross Profit
Acuity Brands Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Acuity Brands previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Acuity Brands Gross Profit growth over the last 10 years. Please check Acuity Brands'
gross profit and other
fundamental indicators for more details.
Closer look at Acuity Brands Downside Variance
Acuity Brands has current Downside Variance of 4.27. Downside Variance (or DV) is measured by target semi-variance and is termed downside volatility. It is expressed in percentages and therefore allows for rankings in the same way as variance. One way to view downside volatility is the annualized variance of returns below the target.
Downside Variance is the probability-weighted squared below-target returns. The squaring of the below-target returns has the effect of penalizing failures at an exponential rate. This is consistent with observations made on the behavior of individual decision-making under.
Downside Variance | = | SUM(RET DEV)2 N(ER) |
| = | 4.27 |
| SUM | = | Summation notation |
| RET DEV | = | Actual returns deviation over selected period |
| N(ER) | = | Number of points with returns less than expected return for the period |
Will Acuity Brands growth be real after the rise?
Current Market Risk Adjusted Performance is up to 0.03. Price may drop again. Acuity Brands currently demonstrates below-average downside deviation. It has Information Ratio of 0.07 and Jensen Alpha of 0.19. However, we advise investors to further question Acuity Brands expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Acuity Brands' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Acuity Brands' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Our Takeaway on Acuity Brands Investment
While some firms under the electrical equipment & parts industry are still a bit expensive, Acuity Brands may offer a potential longer-term growth to stockholders. The bottom line, as of the 3rd of October 2022, our research shows that Acuity Brands is a rather very steady investment opportunity with a
low odds of financial distress in the next two years. From a slightly different view, the entity currently appears to be
undervalued. Our latest 90 days buy-hold-sell recommendation on the company is
Strong Hold.
Building efficient market-beating portfolios requires time, education, and a lot of computing power!
The Portfolio Architect is an AI-driven system that provides multiple benefits to our users by leveraging cutting-edge machine learning algorithms, statistical analysis, and predictive modeling to automate the process of asset selection and portfolio construction, saving time and reducing human error for individual and institutional investors.
Try AI Portfolio ArchitectEditorial Staff
Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management.
View Profile 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.
Would you like to provide feedback on the content of this article?
You can get in touch with us directly or send us a quick note via email to
editors@macroaxis.com