What happened
Power generation specialist Generac Holdings (GNRC 0.92%) sure looked powerful on the stock exchange Tuesday. Oppressively hot weather in the southern U.S. is apparently driving up demand for its backup power solutions, a dynamic that should help the company's fundamentals accordingly. This pushed the company's share price up by nearly 9% on the day, crushing the less than 1.2% gain of the S&P 500 index.
So what
In an article published shortly before market close on Monday and updated the following morning, Bloomberg wrote of the dynamic and how it affects Generac.
It liberally quoted company CEO Aaron Jagdfeld, who said bluntly that "We've seen a dramatic increase in the Texas region in sales leads for our generators and battery backup systems."
"Texas has been a great market for a long time, so this will only add to that in the future," he added.
Generac claims to be the No. 1 manufacturer of backup generators. It has already benefited from the unusual power grid regime in Texas, which is independent of other U.S. systems. The hot and dry state is having yet another bout of extremely hot weather, driving demand for air conditioning -- and the electricity it requires -- well higher.
Now what
According to Jagdfeld, Generac's Texas customers were prepared to supply roughly 1 megawatt of power from their backup systems to the grid last week. It seems that not only the big southern state will need such assistance; experts believe the heat wave will expand into other regions such as the Deep South and the southern portion of the Great Plains.
