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Bull of the Day: Generac (GNRC)

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Company Overview

Zacks Rank #1 (Strong Buy) stock Generac ((GNRC - Free Report) ) is a company that designs and manufactures power generation equipment and other engine-powered products. Its primary focus is on backup power solutions, including residential, commercial and industrial generators. Generac also produces portable generators, pressure washers, transfer switches, and other power-related products. The company’s offerings ensure reliable power during outages and serve various energy needs across different sectors, emphasizing innovation, reliability, and efficiency in power management.

 

Unusually Active Hurricane Season Predicted

Hurricane experts are forecasting an abnormally strong hurricane season with more than twenty named storms likely to form from now until end of the year. Warm ocean temperatures are the main ingredient needed for devastating hurricanes. Forecasters believe that out of the named storms up to seven will be classified as “major hurricanes.”

Stronger hurricanes spurred on by climate change are contributing to Generac’s bottom line and are likely to do so well into the future. Beyond hurricanes, the United States power grid has displayed in vulnerability in recent years. For example, Houston, Texas residents recently lost power for several days. More and more these multi-day outages are becoming common place in states like Florida, Texas, and California. Fortunately for investors, GNRC has the remedy.

 

Relative Price Strength

On Wall Street, strength tends to beget strength. Said alternatively, the trend is your friend until the end when it bends. That’s good news for GNRC shareholders. The stock has doubled the performance of the S&P 500 Index over the past six months and the momentum is only likely to continue as hurricane season arrives.

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A Stealth AI Energy Play

The proliferation of artificial intelligence (AI) applications has caused a spurt in the construction of energy-intensive data centers. This is likely to spur demand for power consumption/backup power in the near future, which is expected to put pressure on the aging power grids.

 

Bottom Line

Hurricanes seem to be more prevalent than ever before. Backup power generation firm Generac is set to cash in.


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