Acuity Brands: 4 Different Insiders Have Sold Shares This Year

Jan.22.14 | About: Acuity Brands, (AYI)

In this article, I will feature one tech stock that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

Acuity Brands (NYSE:AYI) designs, produces, and distributes lighting solutions, components, and services for commercial, institutional, industrial, infrastructure, and residential applications in North America and internationally.

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Insider selling during the last 30 days

Here is a table of Acuity Brands' insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Peter Browning Director Jan 16 927 No 1,464 shares 38.8%
Julia North Director Jan 13 1,815 No 2,626 shares 40.9%
Richard Reece CFO Jan 13 28,500 No 108,086 shares 20.9%
Vernon Nagel CEO Jan 13 81,518 No 277,697 shares 22.7%
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There have been 112,760 shares sold by insiders during the last 30 days.

Insider selling by calendar month

Here is a table of Acuity Brands' insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
January 2014 112,760 0
December 2013 0 0
November 2013 0 0
October 2013 26,630 0
September 2013 0 0
August 2013 1,815 0
July 2013 118,000 0
June 2013 0 0
May 2013 0 0
April 2013 25,335 0
March 2013 0 0
February 2013 1,815 0
January 2013 0 0
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There have been 286,355 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Acuity Brands reported the fiscal 2014 first-quarter, which ended November 30, financial results on January 9 with the following highlights:

Revenue $574.7 million
Net income $44.5 million
Cash $398.1 million
Debt $353.6 million
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Outlook

Third-party forecasts and leading indicators suggest that the growth rate for the North American lighting market, which includes renovation and retrofit activity, will be in the mid-single digit range during 2014.

Competition

Acuity Brands' competitors include Eaton Corporation's (NYSE:ETN) Cooper Lighting division, Hubbell Incorporated (HUB.B), and Koninklijke Philips N.V. (NYSE:PHG). Here is a table comparing these companies.

Company AYI ETN HUB.B PHG Industry Average (Diversified Electronics)
Market Cap: 5.53B 36.69B 7.01B 34.59B 157.00M
Employees: 6,500 102,000 N/A 116,266 710.00
Qtrly Rev Growth (yoy): 0.20 0.42 0.06 -0.04 0.06
Revenue: 2.18B 20.85B 3.13B 31.88B 221.91M
Gross Margin: 0.41 0.30 N/A 0.41 0.26
EBITDA: 310.50M 2.92B 563.10M 4.33B 13.80M
Operating Margin: 0.12 0.10 0.16 0.09 0.04
Net Income: 143.80M 1.56B 315.40M 840.26M N/A
EPS: 3.37 3.44 5.29 0.85 0.06
P/E: 38.69 22.44 22.40 44.56 16.38
PEG (5 yr expected): 2.14 1.43 N/A 19.63 1.00
P/S: 2.57 1.75 2.24 1.09 0.73
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Acuity Brands has the highest P/S ratio among these four companies.

Here is a table of these competitors' insider-trading activities during the last 12 months.

Company Insider buying / shares Insider selling / shares
ETN 0 695,727
HUB.B N/A N/A
PHG N/A N/A
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Only Acuity Brands has seen intensive insider selling during the last 30 days.

Conclusion

There have been four different insiders selling Acuity Brands, and there have not been any insiders buying Acuity Brands during the last 30 days. All four of these insiders decreased their holdings by more than 10%. Acuity Brands has an insider ownership of 0.80%.

There are three analyst buy ratings, 11 neutral ratings, and one sell rating with an average price target of $120.33. Before going short Acuity Brands, I would like to get a bearish confirmation from the Point and Figure chart. The three main reasons for the proposed short entry are bearish analyst price targets, relatively high P/S ratio, and the intensive insider-selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.