Why I’m So Bullish GNRC


Generac (GNRC) – the leading maker of standby backup power generators – is one of my favorite stocks and largest positions. The stock has been decimated in the last couple of years as sales growth and profitability have rolled over. Because electricity is so important, I expected GNRC to be able to withstand any economic downturn – but I was wrong. Nevertheless, as the power grid becomes less and less reliable, my thesis is that more and more people will buy standby backup generators and that they will buy them from GNRC.

GNRC reported mediocre 1Q23 earnings Wednesday morning. Revenue was -22% and EPS -68%. Nevertheless, GNRC maintained its full year guidance – including a 6-10% sales decline – and the stock is rallying hard (+15%) on the report. When I put everything together, my sense is that a bottom is forming in GNRC and the future is bright.

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