Generac Holdings Inc.
) 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
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
). All of these stocks carry a Zacks Rank #2 (Buy).
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