Is Generac Holdings Inc. Destined for Greatness?http://www.fool.com/investing/general/2014/03/14/is-generac-holdings-inc-destined-for-greatness.aspx Alex Planes
March 14, 2014
Investors love stocks that consistently beat the Street without getting ahead of their fundamentals and risking a meltdown. The best stocks offer sustainable market-beating gains, with robust and improving financial metrics that support strong price growth. Does Generac Holdings (NYSE: GNRC) fit the bill? Let's take a look at what its recent results tell us about its potential for future gains.
What we're looking for
What the numbers tell you
How we got here and where we're going
Generac delivered market-topping revenue and earnings per share in its latest quarter, results primarily driven by rising demand for home standby generators and for commercial and industrial backup-power generation as wretched weather continues to pound much of the United States. Fool contributor Steve Symington notes that Generac purchased the generator-product assets of ABB Group's Baldor Electric subsidiary, which is bound to result in a larger industrial product line for North American and international markets. Generac seems poised to capture more of this market because of greater scalability and a heightened focus on organic growth in commercial and industrial power generation.
However, Generac also continues to strengthen its product portfolio with inorganic growth (read: acquisitions) over the past few years. The company recently completed its acquisition of Tower Light, an Italian manufacturer of mobile light towers, which complements Generac's purchase of North American light-tower and mobile generator manufacturer Magnum Products. Fool contributor Eric Volkman notes that the acquisition of Tower Light positions Generac as a global leader in mobile power equipment rental markets, allowing the company to leverage broader product lin