Why Generac Holdings' Shares Jumped
May 8th 2012 2:57PM
Updated May 8th 2012 4:04PM
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: Generac Holdings (NYS: GNRC) is one of the few stocks moving significantly higher today, jumping 26% after releasing first-quarter earnings.
So what: Revenue more than doubled to $294.6 million and earnings rose from $4.8 million to $30.1 million, or $0.44 per share. Both results easily topped analyst estimates. To put a little cherry on top, management said it was planning a special dividend of up to $10 per share.
Now what: The dividend alone would make any stock jump, but the earnings numbers were strong as well. Management even said that the full-year revenue would be at the top end of its guidance. Shares trade at just 11 times forward earnings even after the pop in shares, and I think there's further to run with strong operations and a big return of capital to shareholders.
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At the time this article was published 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.
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