Exploding Insider Buying at This Struggling Homebuilder and Two Other Companies

On Friday, Acuity Brands Inc. (NYSE:AYI) registered an insider purchas for the first time since late 2014, so let’s take a look at the company’s performance in the past several months. Director W. Patrick Battle bought 1,314 shares on Friday at a price of $189.98 per share and currently holds a stake of 1,479 shares. The stock of the provider of lighting and energy management solutions is 23% in the red year-to-date, but it is still up by nearly 12% over the past 12 months. The company’s mixed financial results for the first quarter of fiscal year 2016 that ended November 30 have put additional pressure on the stock. Acuity reported net sales of $736.6 million for the quarter, up from $647.4 million reported a year earlier. Moreover, net income reached a figure of $68.4 million, which marked an increase of 33.9% year-over-year.

The company’s top-line results missed analysts’ expectations of $740.3 million, but Acuity’s management continues to be very bullish about the company’s future prospects, with the growth rate for the North American lighting market anticipated to be in the mid-to-upper single digit range for 2016. Furthermore, the company expects that the lighting and lighting-related industries, including building automation systems, will achieve sound growth in the upcoming ten years or so, and Acuity Brands is well-positioned to capitalize on that growth. Nonetheless, the stock appears to be trading at a rather expensive forward P/E ratio relative to the broader market of 20.14, but the company’s multiple avenues for growth seem to justify the high valuation (the forward P/E ratio for the S&P 500 benchmark equals 15.87). Ken Heebner’s Capital Growth Management owned 315,000 shares of Acuity Brands Inc. (NYSE:AYI) at the end of September.