Acuity Brands, Inc. (AYI, Financial), the leading domestic provider of lighting solutions, is benefitting from secular demand for more energy efficiency and the trend to retrofit to LED lighting. The shares gained 21% in the quarter after the company posted strong results. Revenues grew 19.5%, led by LED sales which doubled and now comprise more than a quarter of the company's sales. We see a long runway of growth for Acuity since the LED revolution is early in its development and will
accelerate as the cost of LED decline, making the lamps more affordable. Plus, we think non-residential construction is rebounding, so the cyclical backdrop is also improving.
From Baron Funds' first quarter 2014 commentary.
