CAPScall of the Week: Generac Holdingshttp://www.fool.com/investing/general/2012/09/04/capscall-of-the-week-generac-holdings.aspx Sean Williams
September 4, 2012
For years, satirical late-night-TV host Stephen Colbert has been running a series on his show called "Better Know a District," which highlights one of the 435 U.S. congressional districts and its representative. While I am no Stephen Colbert, I am brutally inquisitive when it comes to the 5,000-plus listed companies on the U.S. stock exchanges.
That's why this week and every week from here on out, I'll make it a tradition to examine one seldom-followed company within the Motley Fool CAPS database and make a CAPScall of outperform or underperform on that company.
What Generac Holdings does
In Generac's most recent quarter, the company announced a 48.2% increase in total sales and a 41.5% increase in adjusted EPS. Driving growth was a 33.8% jump in residential product sales and a 76.4% surge in commercial and industrial segment sales. The big jump in revenue from the commercial and industrial segment was due to its acquisition of Magnum Products, a manufacturer of light towers, in October for $80 million.
Whom it competes against
Although commercial and industrial generators aren't the focus product for Caterpillar (NYSE: CAT ) and Cummins (NYSE: CMI ) -- who tend to focus on heavy-duty machinery and diesel engine production, respectively -- they nonetheless represent a challenge for Generac. Cat's offerings are particularly unique because they can be run off of oil, natural gas, or other alternative fuels, while Cummins' generator sales have benefited in recent weeks after multiple grid failures in India.