Joe Terranova Generac GNRC-N DON'T BUY Jun 22, 2022

Be patient with this. A hurricane season will be a boon, because they make emergency generators. This is volatile.

Likes it, but with these companies, you need credit to buy their solar products, and the price of credit keeps rising,

Turns out that it had a lot more to do with interest rates than expected, but it's now okay as interest rates decline. This has another 10-15 points to run.

80% of the North American market is owned by Generac. The market is about 6.5% penetrated. Every 1% increase in penetration increases revenues by about $6B to the industry, so you can do the math. Hurricanes and weather outages are what drive this company. Sees outages continuing as the grid deteriorates. 

An interesting play on grid deterioration, and people taking matters into their own hands when you can't trust the local power company.

We think it is a hold, although growth has been slow/declining and it is not cheap at 19x forward earnings. EPS is forecasted to grow at approximately ~20% annually for the next three years, so there is some appeal if GNRC can start consistently meeting/beating expectations. The risk is that it does not offer a safety net of any dividend, but GNRC does have a decent buyback yield at 3.51%. We do not think it is a must own, but it does have high cash flows and if revenue and earnings growth picks up it could look more attractive.
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This pulled back with the market in December. He would add more shares as it maintains support and continues its uptrend.

Generators are in strong demand across North America. Small increase in demand for product will see large increases in profits. Backup power is more important now especially with EV and A.I. data center demand. Excellent growth prospects, and seeing value in current share price.