This is a step-by-step stock review to answer the question, is Generac Holdings (GNRC) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Generac Holdings (GNRC) stock a good buy?
- Generac Holdings Company History
- MOS
- Meaning
- Moat
- Management
- 4M Score
- Is Generac Holdings (GNRC) stock a good buy?
1. Generac Holdings Company History
When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
- Founded in 1959: Generac Holdings began as a small company in Waukesha, Wisconsin, dedicated to producing affordable and reliable generators.
- Early Innovations: Pioneered the first affordable backup generator for residential use in the 1980s.
- Expanding Product Line: Introduced portable generators, industrial power solutions, and home standby generators.
- IPO in 2010: Went public on the New York Stock Exchange under the ticker symbol GNRC.
- Acquisitions: Acquired numerous companies, enhancing its product offerings and global reach, including Magnum Products, Ottomotores, and Pika Energy.
- Leader in Clean Energy: Expanded into clean energy solutions with solar and battery storage products, reflecting a commitment to sustainable energy.
- Customer-Centric Focus: Known for exceptional customer service and innovative solutions tailored to diverse power needs.
- Global Expansion: Established a significant presence in international markets, providing power solutions worldwide.
- Awards and Recognition: Consistently recognized for excellence in manufacturing and business leadership.
- Continued Growth: Maintains a strong market position with a focus on innovation, reliability, and customer satisfaction, aiming to power the next generation of energy solutions.
2. MOS (Margin Of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Watch
- Score: 50
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Generac Holdings makes money:
- Home Standby Generators: Sells generators for residential use to provide backup power during outages.
- Portable Generators: Offers portable generators for use at homes, worksites, and recreational activities.
- Industrial Generators: Provides large generators for commercial and industrial applications, ensuring continuous power for businesses.
- Clean Energy Solutions: Sells solar power and battery storage systems to promote sustainable energy use.
- Service and Maintenance: Generates revenue from service contracts, maintenance, and repair services for its generators and power systems.
- Parts and Accessories: Sells replacement parts and accessories for its wide range of power products.
- Rental Solutions: Offers generator rental services for temporary power needs at events, construction sites, and emergencies.
- Light Towers: Provides mobile light towers used in construction, emergency services, and outdoor events.
- Power Equipment: Sells other power equipment, including pressure washers and water pumps, for residential and commercial use.
- Global Sales: Earns money from international sales of its products in various countries worldwide.
Generac Holdings uses these various streams to maximize their earnings and provide diverse services to moviegoers.
Here are a few of the other companies that Generac Holdings has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.
- Selmec
- Motortech
- Deep Sea Electronics
- Enbala Power Networks
- Chilicon Power
- Pika Energy
- Neurio Technology
- Pramac
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Generac Holdings stacks up against other companies.
- Parker-Hannifin Corporation. (PH) – 95
- Tennant Company. (TNC) – 95
- Eaton Corporation plc. (ETN) – 84
- Howmet Aerospace Inc. (HWM) – 84
- ATS Corporation. (ATS) – 78
- Generac Holdings Inc. (GNRC) – 50
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Increased Sales: Under Aaron Jagdfeld’s leadership, Generac’s sales grew significantly, reaching record highs.
- Market Expansion: He successfully expanded Generac’s market presence both domestically and internationally.
- Product Innovation: Jagdfeld drove the development of new and innovative products, including home standby generators and clean energy solutions.
- Acquisitions: He led several key acquisitions, such as Pika Energy, which expanded Generac’s capabilities in the renewable energy sector.
- Stock Performance: Generac’s stock price saw substantial growth, benefiting shareholders.
- Operational Efficiency: Improved the company’s operational efficiency, resulting in better profit margins.
- Customer Focus: Enhanced customer service and support, strengthening Generac’s reputation.
- Brand Recognition: Increased brand recognition through effective marketing and strategic initiatives.
- Sustainability Initiatives: Promoted sustainable practices and introduced environmentally friendly products.
- Financial Stability: Maintained strong financial health and resilience of the company through economic cycles.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Generac Holdings (GNRC) is 53/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Generac Holdings (GNRC) stock a good buy?
Some of the top questions investors can have is Generac Holdings (GNRC) stock a good buy or should I buy Generac Holdings (GNRC) stock?
Generac Holdings is a strong investment opportunity due to its leadership in backup power generation and clean energy solutions. The growing demand for reliable power sources, driven by increasing power outages and a focus on energy independence, positions Generac for significant growth. Its innovative product range, including home standby generators and solar-powered systems, caters to a broad market. The company’s strong financial performance, strategic acquisitions, and expansion into new markets bolster its growth prospects. However, potential investors should be aware of risks such as economic downturns and competition. Overall, Generac’s market dominance, product innovation, and financial health make it a compelling choice for long-term investors seeking exposure to the renewable energy and power solutions sector.
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To truly know if Generac Holdings is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
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