Acuity Brands (AYI) is a leading light manufacturer that designs, produces and distributes a full range of indoor and outdoor lighting and control systems for commercial, industrial, infrastructure and residential applications, notes value investing expert John Buckingham, editor of The Prudent Speculator.

Shares are off more than 25% year-to-date as lower demand due to the pandemic pushed revenue down 18% in the most recent quarter, while many have become worried about exposure to commercial real estate.

Earnings have held up very well, though, with fiscal Q3 numbers blowing away expectations, while the balance sheet is very solid with more cash than debt.

We also like a recent partnership, exclusive in North America, with Ushio America to offer filtered excimer lamps that generate 222nm of far UV-C light capable of inactivating viruses and bacteria on indoor surfaces. And, we are intrigued by the company’s opportunities in the Internet of Things.

Acuity’s indoor location services data platform provides navigation, wayfinding, asset tracking, occupant behavior data and asset analytics using a connected lighting platform, a real plus as businesses are busy reconfiguring space for hygiene and social distancing purposes. We also like the sub-13 forward P/E multiple, versus the 5-year average above 20.

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