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Generac Holdings: obvious beneficiary from dire US need for power storage upgrade


Generac Holdings (NYSE:GNRC) is a leading global designer and manufacturer of a wide range of energy technology solutions. Generac provides power generation equipment, energy storage systems, grid service solutions, and other power products serving the residential, light commercial and industrial markets.

Power generation and storage is a key focus of Generac, which differentiates the company from its competitors who also have broad operations outside of the power equipment market. As the only significant market participant with a primary focus on these products, Generac maintains one of the leading market positions in the power equipment market in North America and an expanding presence internationally.

Generac has one of the widest ranges of products in the marketplace, including residential, commercial and industrial standby generators; as well as portable and mobile generators used in a variety of applications. Also, during 2019, Generac began providing energy storage systems as a clean energy solution for residential use that capture and store electricity from solar panels or other power sources and helps reduce home energy costs while also protecting homes from shorter-duration power outages.

During 2020, Generac entered the market for grid services involving distributed energy optimisation and control software that helps support the operational stability of the world’s power grids.

Generac stock trading action so far

Generac was trading before the Covid-19 at around the $100 level to February, 2020. The Covid-19 bottom was reached on March 23rd, 2020 at $84,78. The market cap of Generac shares is roughly $28 billion.

The trading range was between the 52 week high of $452.92 achieved 12th of July 2021 and a 52-week low of $126.02 on 14th of July 2020. The stock closed at $445,23 (-1,70% from an All Time High at the time of writing this article on July 13th, 2021.

I would start a position with GNRC at these record levels, because even with President Biden’s infrastructure bill coming, the electrical grid is in dire straits and it will be not fixed in months or even years.

The next reporting date of the company is July 28th, 2021. The analyst community has 10 strong buys, 5 buys and only 2 holds. The target prices of the stock are $450-480 level before the earnings release. The company is part of the S&P 500 index, which also gives the stock many institutional shareholders and index funds. This stock keeps on giving for years to come.

Everybody wants reliable power “Grid 2.0” – your own back up power

Evolution of the traditional electrical utility model: technology and regulation will create clean energy and grid services opportunities. Attitudes around global warming and climate change are changing.

In the USA you never know when there is going to be power outage and for how long?: Hurricanes, floods, tornadoes, sudden freezes (Texas) and even firestorms (California) are all taking their toll on the US energy infrastructure. In the Nordic countries these things would not happen, because people would die and therefore the infrastructure is maintained in high level.

Natural gas is still likely to be the fuel of the future, barring any sudden breakthroughs in hydrogen. There is huge supply of natural gas coupled with increasing demand for applications beyond standby power. Legacy infrastructure needs a major investment cycle and rebuilding of transportation, water and power will take decades in the USA, despite the plans of the new administration.

Your home as your castle or sanctuary is doubly true today

Millions more people are working, learning, shopping, entertaining, and in general, spending more time at home even after Covid-19 pandemic has passed. This is creating more demand on the localised power infrastructure in the US.

Generac went public on February 11, 2010, Generac Holdings Inc. (NYSE: GNRC), parent company of Generac Power Systems, Inc., began trading on the New York Stock Exchange under the ticker symbol GNRC. Since 2010 Generac has bought 14 businesses in the power generation sector.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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