Generac: Trade Short-Term Uncertainty For Long-Term Value

Nov. 30, 2022 6:41 AM ETGenerac Holdings Inc. (GNRC)ENPH, NEE, NEEPRR, SPY, TSLA, XLU19 Comments


  • Contrarian trade based on downturn in stock compared to relative resilience in fundamentals.
  • Valuation was stretched during the pandemic, but has since returned to long run averages.
  • Future growth prospects are bright based on macro factors including climate change, demographics, and aging infrastructure.
  • The surge in inventory has dampened recent cash flows, but should be a temporary challenge as long as demand returns to long run levels and margins can be maintained.
Electrical power outage due to heavy storm

nycshooter/iStock via Getty Images

Generac (NYSE:GNRC), the Waukesha, WI based designer and manufacturer of energy and power technologies and products, has experienced incredibly poor performance so far this year, much worse than the broader markets. The company is probably best known for its residential back-up electrical generator

This article was written by

As a professional portfolio manager and investment analyst, I advise clients on all aspects of investment strategy, asset allocation, and investment selection. With experience at both wire houses and RIAs, I have worked extensively with high net worth individuals, successful families, and non-profit institutions. My focus has always been to educate clients of the benefit of maintaining a long-term view that is goal-oriented, and insulated from the day-to-day noise. I believe that investors who base portfolio construction on a durable strategy, while avoiding tactical moves, are best served and will realize a more favorable investment experience. In addition to my professional experience, I have also earned an MS in finance, BA in economics, and hold the CFA designation. The opinions expressed here are my own and not that of my employer.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Short position through short-selling of the stock, or purchase of put options or similar derivatives in GNRC over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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