Why Generac Holdings (GNRC) Stock is a Compelling Investment Case

Polen Capital Management recently released its Q3 2020 Investor Letter, a copy of which you can download here. During the third quarter of 2020, the Polen U.S. SMID Company Growth Composite Portfolio returned 7.11% gross of fees, while the Russell 2500 Growth Index was up 9.37%. You should check out Polen Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Polen Capital highlighted a few stocks and Generac Holdings Inc. (NYSE:GNRC) is one of them. Generac Holdings Inc. (NYSE:GNRC) is a leading global designer and manufacturer of a wide range of energy technology solutions. Year-to-date, Generac Holdings Inc. (NYSE:GNRC) stock gained 124% and on November 11th it had a closing price of $225.29. Here is what Polen Capital said:

“Generac Holdings was a top contributor during the quarter. The company is a leading provider of power generation equipment for residential and commercial customers globally. Generac’s main product, home standby generators, has seen strong demand as consumers increasingly value solutions that provide quality and consistent energy sources and clean energy alternatives. Generac’s dominant market share (~80%) in the home standby generator market, which it helped to create, is attractive and growing, and market penetration stands at less than 5% in the U.S. today. Customers’ dependence on secure power sources has grown during the pandemic as millions of people have been forced to work, educate, and entertain from the confines of their homes. This has led to robust demand for Generac’s residential power products. Importantly, we believe management has continued to make thoughtful investments and bolt-on acquisitions to further grow its competitive position and increasingly meet the growing needs of customers.”


In Q2 2020, the number of bullish hedge fund positions on Generac Holdings Inc. (NYSE:GNRC) stock increased by about 24% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Generac’s growth potential. Our calculations showed that Generac Holdings Inc. (NYSE:GNRC) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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