07. Generac Holdings Inc. (NYSE:GNRC)
Number of Hedge Fund Holders: 35
Generac Holdings Inc. (NYSE:GNRC) is a leading provider of energy technology products and solutions, making it an essential addition to any list of hurricane and natural disaster stocks. The company specializes in a wide range of products, including residential standby generators, portable generators, energy storage solutions, and backup power systems for both residential and commercial applications. With the increasing frequency of severe weather events, Generac Holdings Inc. (NYSE:GNRC) offerings are positioned to see continued demand as consumers and businesses alike seek to protect themselves from prolonged power outages.
In the second quarter of 2024, Generac Holdings Inc. (NYSE:GNRC) reported revenues of $998 million, which were flat year-over-year. Residential product sales rose by 8% due to robust demand for home standby generators, driven by increased power outage activity following major storms like Hurricane Beryl. Although commercial and industrial (C&I) sales declined by 10%, mainly due to softness in telecom and rental markets, Generac Holdings Inc. (NYSE:GNRC) remains optimistic about long-term growth opportunities. The company’s strategic focus on operational execution and expanding market share within its North American industrial distributor network has been pivotal in maintaining its industry leadership.
Despite missing earnings expectations for the quarter, with an EPS of $0.975 compared to the forecasted $1.24, Generac Holdings Inc. (NYSE:GNRC) gross and adjusted EBITDA margins expanded significantly from the prior year, driven by a favorable sales mix and reduced input costs. The company’s dealer network also grew to approximately 8,900 residential dealers, reflecting a strong distribution model and enhanced market penetration. Moreover, home consultations saw sequential growth, further supported by Generac Holdings Inc. (NYSE:GNRC) initiatives to improve sales lead conversion and optimize lead nurturing practices.
Generac’s recent $35 million investment in Wallbox to develop integrated EV charging solutions further strengthens its position in the growing residential energy management market. In addition, Generac Holdings Inc. (NYSE:GNRC) is expanding its market presence through strategic acquisitions like SunGrid Solutions, enhancing its capabilities in energy storage for C&I applications. The number of hedge funds holding Generac increased to 35 in Q2 2024, compared to 33 in the previous quarter, highlighting increased investor interest.
Overall, Generac Holdings Inc. (NYSE:GNRC) is poised to capitalize on the rising demand for energy resiliency solutions in response to more frequent and severe weather events, making it a strong contender among hurricane and natural disaster stocks to consider for long-term growth.
Diamond Hill Capital Mid Cap Strategy stated the following regarding Generac Holdings Inc. (NYSE:GNRC) in its first quarter 2024 investor letter:
“Though valuations have increased, we continue identifying high-quality companies we believe the market is overlooking. We accordingly initiated four new positions in Q1: Generac Holdings Inc. (NYSE:GNRC), Diamondback Energy (FANG), Johnson Controls International and Humana. Generac Holdings is a leading energy technology solutions manufacturer with a dominant position in residential home standby power. With its strong position in home standby and diverse energy solutions offerings, Generac is well-positioned for growth moving forward as increasing electricity usage and electrical grid instability drive demand for its products. Shares have been pressured over the last couple years as the company has faced inventory-related headwinds and soft near-term demand — giving us an opportunity to initiate a position at what we believe is a compelling discount to intrinsic value.”
