1. The Move
Acuity Brands rose about 31 bags between 2001 and 2016:
It had two 50% plus drawdowns.
2. Business Description
Acuity Brands, Inc. (NYSE: AYI) is the North American market leader and one of the world’s leading providers of lighting and building management solutions. With fiscal year 2019 net sales of $3.7 billion, Acuity Brands currently employs approximately 12,000 associates and is headquartered in Atlanta, Georgia with operations throughout North America, and in Europe and Asia. The Company’s products and solutions are sold under various brands, including Lithonia Lighting®, Holophane®, Aculux®, A-Light™, American Electric Lighting®, Antique Street Lamps™, Atrius®, Cyclone™, DGLogik™, Distech Controls®, DTL®, eldoLED®, Eureka®, Gotham®, Healthcare Lighting®, Hydrel®, Indy™, IOTA®, Juno®, Lucid®, Luminaire LED™, Luminis®, Mark Architectural Lighting™, nLight®, Peerless®, RELOC® Wiring, ROAM®, Sensor Switch®, Sunoptics® and Winona® Lighting. Know more at www.acuitybrands.com
3. Fundamental Situation at Bottom & Top
4. Brief Story
In 2001 Acuity Brands was a profitable company undervalued by the market, followed by a margin and multiple expansion.
The net profit margin expanded from 2% to 9%; the price to sales ratio went from a very depressed 0.2 level to 3.7, and the p/e ratio rose from 9 at the bottom to 42 at the top.
It’s interesting how EBITDA only rose 161% while the stock price went up by 3,053%.
The next time we see a profitable, stable company trading at 1/5 of its annual sales, we must consider if we are in the presence of a future multi-bagger.