Generac (GNRC) Looks to Energize Portfolios as Generator Sales Jump - Barron's
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Price: $138.85 +1.22%
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 28.9%
Revenue Growth %: -0.1%
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 28.9%
Revenue Growth %: -0.1%
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There's nothing like a power outage to increase fears, concerns, and stress, not to mention the dangers the ordeal imposes especially in the chillier winter months.
Generac (Nasdaq: GNRC) is hoping to put those fears to ease, Barron's suggested in an article over the weekend. Following the recent slew of bad weather which hit much of the Northeast a few weeks ago, Generac may be poised for a strong run as orders for its generators continue to roll in, even two weeks after the storms stopped.
Power to millions continues to be absent, increasing demand as the days tick past.
One Connecticut reseller of generators said his store is getting from 50 to 80 calls everyday about either pricing or installing generators to homes that were affected by the storms.
The generators, which can produce 8,000 to 48,000 watts of power and run on either natural gas or propane, retail for about $5,000 to $25,000 apiece.
Barron's said about 40 percent of Greenwich, CT, homes on the market for $3 to $5 million have a generator. But that is an anomaly, with about 98 percent of U.S. homes sans backup power.
Should fear cause more homeowners to make the move to a back-up generators, Generac is poised to move. The company currently boasts a 70 percent share of the residential-generator market.
Shares of Generac are up 7 percent since October, and 46 percent for 2011. Despite the move, Barron's notes the stock is still cheap, trading for 12x expected 2011 earnings, and 10x next year's earnings.
Generac might just be a takeover target, Barron's argues, with a current market cap at $1.6 billion. Private-equity firm CCMP Capital still retains a controlling 59 percent stake in the company after taking it public in 2010.
Despite a number of concerns, Generac believes its generators have key advantages over other, portable systems: they kick-on automatically, run quieter and cleaner, and don't need refueling if attached to a nat gas line.
With Generac expecting a 30 percent increase in sales for its fourth quarter, and just coming off strong third-quarter numbers, investors might be wise to buy as the company aims to power up portfolios in 2012.
Shares of Generac are up just 0.4 percent Monday.
Generac (Nasdaq: GNRC) is hoping to put those fears to ease, Barron's suggested in an article over the weekend. Following the recent slew of bad weather which hit much of the Northeast a few weeks ago, Generac may be poised for a strong run as orders for its generators continue to roll in, even two weeks after the storms stopped.
Power to millions continues to be absent, increasing demand as the days tick past.
One Connecticut reseller of generators said his store is getting from 50 to 80 calls everyday about either pricing or installing generators to homes that were affected by the storms.
The generators, which can produce 8,000 to 48,000 watts of power and run on either natural gas or propane, retail for about $5,000 to $25,000 apiece.
Barron's said about 40 percent of Greenwich, CT, homes on the market for $3 to $5 million have a generator. But that is an anomaly, with about 98 percent of U.S. homes sans backup power.
Should fear cause more homeowners to make the move to a back-up generators, Generac is poised to move. The company currently boasts a 70 percent share of the residential-generator market.
Shares of Generac are up 7 percent since October, and 46 percent for 2011. Despite the move, Barron's notes the stock is still cheap, trading for 12x expected 2011 earnings, and 10x next year's earnings.
Generac might just be a takeover target, Barron's argues, with a current market cap at $1.6 billion. Private-equity firm CCMP Capital still retains a controlling 59 percent stake in the company after taking it public in 2010.
Despite a number of concerns, Generac believes its generators have key advantages over other, portable systems: they kick-on automatically, run quieter and cleaner, and don't need refueling if attached to a nat gas line.
With Generac expecting a 30 percent increase in sales for its fourth quarter, and just coming off strong third-quarter numbers, investors might be wise to buy as the company aims to power up portfolios in 2012.
Shares of Generac are up just 0.4 percent Monday.
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