Sell Acuity Brands (NYSE: AYI)

By Linda McDonough • April 4, 2017

Acuity reported a disastrous quarter this morning. Despite already lowering estimates once, earnings were less than expected. Worse yet, the company warned that growth would not return until 2018. I waited too long to sell this stock with the, unfortunately, incorrect, assumption that weakness in sales was temporary.

Although I hate taking a large loss, I don’t see Acuity bouncing much from here. The company has a conference call at 10 am which might inspire a small bounce but I don’t expect a big upward move.

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DR083157

04/05/17 ‐ 12:35pm ET April 5, 2017 at 12:35pm ET

Linda, you just sent out a article on mind over markets that is basically slamming Lulu Lemmon. Can you recomend an option trade on this please along withthe trade rationale. I typically do very well with your suggestions and thus asking for one to augment your research. Rgds, Doug

Linda McDonough

04/05/17 ‐ 5:36pm ET April 5, 2017 at 5:36pm ET

Doug,
I am certainly looking at LULU for some trades in the future. The stock has dropped so much and so quickly that the options are too expensive to offer a good return for us. However, LULU is on my daily screen so I expect we’ll have a nice set up in the future.
Best,
Linda

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About The Author

Linda McDonough

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Linda McDonough is a veteran hedge fund analyst who loves to break down company financial statements and identify market inefficiencies to uncover big opportunities. She believes in a boots-on-the-ground approach that includes surveying customers, interviewing company executives, or doing whatever it takes to see what others don't.

She's now brought her experience as a hedge fund analyst to subscribers of her Profit Catalyst Alert service. Her system identifies small- and mid-cap stocks that are about to move due to catalytic events that few others can identify...until it's too late. These events often times result in massive gains for her followers.