Time To Power Your Portfolio With Generac?

Author: Scott Rutt
Published: November 01, 2012 at 6:01 am
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With the cleanup from Hurricane Sandy well underway throughout the mid-Atlantic, shares of standby generator maker Generac were among the first stocks to surge higher as the markets reopened from their two-day, storm-induced hiatus. Shares of Generac rose over 18% to $33.46 a share after the company coincidentally released its third quarter results which saw a 25.6% rise in net sales. Generac also significantly revised its 2012 guidance upward due to increased demand for its home standby and portable generators as a result of the major power outage activity that is currently taking place.

While the easy money has clearly already been made in Generac, which now sits at a new all-time high, the real question is whether the stock's remarkable two-year run from just $11 a share in May 2010 has now run its course or is only just beginning.

As a long-time resident of the Washington, DC suburbs, one of the areas hit by Sandy, I can confirm that change seems to be in the air where the weather is concerned. Hurricanes, it was largely felt, were events that only afflicted Florida and the Carolinas, certainly not Washington. Yet here we are, dealing with Sandy just 14 months after dealing with Hurricane Irene. Then there are the blizzards, those "once every 100 year" storms that now seem to be hitting our region every two or three. When, exactly, did "snowmageddon" enter our lexicon? Throw in the magnitude-5.8 earthquake that hit DC in Aug 2011 and you can see why the need for your own generator may no longer be reserved for survivalists in remote wilderness enclaves.

I, myself, have visited the Generac website on more than one occasion over the past few years, and as the frequency of these weather events increase and the worries over losing power for days or weeks at a time looms ever larger, I can see more and more of my neighbors investing in generators just as they did in fancy snowblowers after the blizzard of 2010. I can see the impending battle over who has the most kilowatts and who can keep the fridge running the longest looming on the horizon.

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Article Author: Scott Rutt

I'm a financial journalist at TheStreet.com covering the stock market, Jim Cramer and Mad Money. I also blog at ScottRutt.com and contribute to Technorati and others.

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