What Makes Generac Holdings (GNRC) a Lucrative Investment?

Matrix Asset Advisors, an asset management company, released its Q1 2025 investor letter. A copy of the letter can be downloaded here. After two years of gains exceeding 20%, the stock market rally ended in February when the president intensified his tariff threats. Technology and Growth stocks drove the stock market’s first-quarter decline. Matrix’s portfolios performed well during a challenging quarter. The Matrix Dividend Income portfolio recorded a slight positive return, while the LCV portfolio, which is more exposed to Technology, experienced a modest decline. Matrix’s Large Cap Value Portfolio (LCV) was down low single digits in Q1, surpassing the S&P 500® Index’s loss but behind the Russell 1000 Value’s 2.14% gain.  Matrix Dividend Income (MDI) started the year positively, growing low single digits in Q1, ahead of both the S&P 500®’s loss and the Russell 1000® Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Matrix Asset Advisors highlighted stocks such as Generac Holdings Inc. (NYSE:GNRC). Generac Holdings Inc. (NYSE:GNRC) is a manufacturer and supplier of power generation equipment, energy storage systems, and other power products. The one-month return of Generac Holdings Inc. (NYSE:GNRC) was 10.21%, and its shares lost 15.67% of their value over the last 52 weeks. On May 27, 2025, Generac Holdings Inc. (NYSE:GNRC) stock closed at $126.06 per share with a market capitalization of $7.448 billion.

Matrix Asset Advisors stated the following regarding Generac Holdings Inc. (NYSE:GNRC) in its Q1 2025 investor letter:

“The market’s volatility during the quarter gave us the opportunity to be more active than usual with portfolio buys and sells. On the buy side, we added two new positions to the portfolio, Generac Holdings Inc. (NYSE:GNRC) and PepsiCo. Generac provides backup and prime power generation products for residential and commercial & industrial (C&I) applications. The company’s corporate purpose is to lead the evolution to more resilient, efficient, and sustainable energy solutions around the world. Generac’s business gets a lot of attention when there are power disruptions from weather-related events or other natural disasters, but we believe this is a long-term secular growth story as the demand for reliable power increases. We did the work on this company last year and have been waiting for the opportunity to purchase the shares on price weakness. Our initial purchase was made at $125 per share, down from a 52-week high share price of $195.”

A technician in protective gear repairing a huge generator at a power plant.

Generac Holdings Inc. (NYSE:GNRC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held Generac Holdings Inc. (NYSE:GNRC) at the end of the first quarter, compared to 59 in the previous quarter. Generac Holdings Inc.’s (NYSE:GNRC) net sales increased 6% year-over-year to $942 million in the first quarter of 2025. While we acknowledge the potential of Generac Holdings Inc. (NYSE:GNRC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Generac Holdings Inc. (NYSE:GNRC) and shared Conestoga Capital Advisors’ views on the company. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.