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Investment summary
My previous investment thought on Acuity Brands Inc. (NYSE:AYI) (published on 9th September 2024) was a buy rating because I was bullish on the growth outlook, given that multiple data
Acuity Brands Inc.: Stay Bullish As Growth Should Turn Better
Summary
- I maintain a buy rating on Acuity Brands Inc. due to strong growth prospects in both ABL and ISG segments, supported by positive demand indicators.
- 1Q25 results showed 2% y/y revenue growth to $952 million, driven by ABL's stable performance and ISG's 15% y/y growth, with notable margin expansion.
- Easing interest rates and a robust non-residential construction pipeline, evidenced by the Dodge Momentum Index, bolster ABL's growth outlook for FY25.
- ISG's growth is fueled by escalating AI infrastructure demand, with significant investments from big tech, ensuring sustained revenue and margin improvements.
I focus on long-term investments while incorporating short-term shorts to uncover alpha opportunities. My investment approach revolves around bottom-up analysis, delving into the fundamental strengths and weaknesses of individual companies. My investment duration is the medium to long-term. Ultimately, I aim to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential.
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