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Why Generac Holdings' Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Generac Holdings (NYSE: GNRC  ) is one of the few stocks moving significantly higher today, jumping 26% after releasing first-quarter earnings.

So what: Revenue more than doubled to $294.6 million and earnings rose from $4.8 million to $30.1 million, or $0.44 per share. Both results easily topped analyst estimates. To put a little cherry on top, management said it was planning a special dividend of up to $10 per share.

Now what: The dividend alone would make any stock jump, but the earnings numbers were strong as well. Management even said that the full-year revenue would be at the top end of its guidance. Shares trade at just 11 times forward earnings even after the pop in shares, and I think there's further to run with strong operations and a big return of capital to shareholders.

Interested in more info on Generac Holdings? Add it to your watchlist by clicking here.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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Read/Post Comments (3) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 09, 2012, at 12:59 AM, FarleyButch wrote:

    Kind of makes the previous MF article about how shares will be moving slowly downward look foolish. Up over 25% today.

    That article on inventory showed how little research the writer invested in the criticism of GNRC. Seasonal buying in particular was ignored or at least misunderstood.

  • Report this Comment On May 09, 2012, at 8:34 AM, bobbyk1 wrote:

    I was fortunate to pick up some GNRC a couple weeks ago.When they anounced their intentiion to award a one time 10 dollar dividend I was amazed.So this morning Goldman downgrades the stock to nuetral.Is there any reason not to add to my posistion?The dividend alone gives you a 30% bump.

  • Report this Comment On May 18, 2012, at 8:34 AM, TerrorByteFX wrote:

    Did they give any indication of when the divs were going to be paid out? Was it only to current stock holders as of earnings or a future date?

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10/21/2016 4:02 PM
GNRC $36.70 Up +0.01 +0.03%
Generac Holdings CAPS Rating: ****