Why Generac Holdings' Shares Jumped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of generator maker Generac Holdings (NYS: GNRC) rose as much as 14% today after the company released better than expected earnings.
So what: Revenue rose 48% in the quarter to $239.1 million, above the $227.9 million analysts expected, and net income was $9.3 million, or $0.14 per share. On an adjusted basis, which Wall Street usually compares against, earnings per share were $0.58, topping estimates of $0.55.
Now what: The company definitely benefited from the hot summer as backup power was on the mind of homeowners and businesses. I think this will continue to drive sales as people on the East Coast, in Texas, and those watching outages in India become more aware of the need for backup power. With shares trading at just 10.3 times forward earnings, I think they can move significantly higher from here.
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The article Why Generac Holdings' Shares Jumped originally appeared on Fool.com.Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.