Generac Reaches 52-Week High - Analyst Blog

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Shares of Generac Holdings Inc. ( GNRC ) hit a new 52-week high of $52.32 on Oct 25, and eventually closed at $50.44. Shares of this diversified machinery company have been on a rise since it announced strong results for the third quarter of 2013 together with a strong outlook for 2013 on Oct 24.

Year-to-date, share prices have recorded a healthy return of 63.2%. The company's long-term estimated earnings per share growth rate is 10.3%. Average volume of shares traded over the last three months came in at 876.2K.

In the third quarter of 2013, adjusted earnings per share for the company was $1.06, beating the Zacks Consensus Estimate of 83 cents by 27.7%. Results also surpassed the year-ago earnings by 35.9%. Generac announced 20.9% year-over-year increase in revenues to $363.3 million in the reported quarter. The year-over-year rise was mainly a result of both inorganic and organic revenue growth.

Generac experienced a rise in demand from households for backup power in the quarter. Also, the company's acquisitions of Ottomotores and Tower Light Slr significantly boosted revenues of the Commercial & Industrial segment, recording a year-over-year growth of 61.8% to $151.5 million.

Exiting the third quarter, the company entered into an agreement with Baldor Electric Company to acquire Baldor's generator division. This merger will enable Generac to further explore the North American and the international markets.

Based on the strong results, management revised upwards its guidance for 2013. Net sales growth is now projected in the low-to-mid 20% range, up from the low 20% range expected earlier. Additionally, adjusted EBITDA growth is estimated to improve from a low 20% range to a low 30% range.

The Zacks Consensus Estimate for 2013 has increased 3.7% in the last seven days to $3.91 per share and for 2014 the estimate went up 1.9% to $3.69 per share during the same time frame.

Other Stocks to Consider

Generac currently carries a Zacks Rank #3 (Hold). Other stocks worth a watch in the industry include IDEX Corp. ( IEX ), Nordson Corp. ( NDSN ) and Parker-Hannifin Corp. ( PH ). All of these stocks carry a Zacks Rank #2 (Buy).

GENERAC HOLDING (GNRC): Free Stock Analysis Report

IDEX CORP (IEX): Free Stock Analysis Report

NORDSON CORP (NDSN): Free Stock Analysis Report

PARKER HANNIFIN (PH): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: GNRC , IEX , NDSN , PH

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