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>>> Generac (GNRC) Launches Two Powermate Portable Generators
Zacks Equity Research
May 11, 2022
https://finance.yahoo.com/news/generac-gnrc-launches-two-powermate-154203601.html
Generac Power Systems Inc. GNRC announces the launch of Powermate 4500-Watt Dual Fuel Portable Generator and the Powermate 7500-Watt Dual Fuel Portable Generator.
Both generators are available for purchase online at Powermate.com. The models are also available at a few select retail outlets.
Generac added that the new flexible generators are designed to use for home as well as recreational purposes by consumers.
The Powermate 4500-Watt Dual Fuel Portable Generator has a starting power of 4,500 watts and a running power of 3,600 watts (gas), enabling it to power small electrical appliances at an outdoor location (picnic or campground) and certain power tools for home DIY work.
The Powermate 7500-Watt Dual Fuel Portable Generator is also suitable for outdoor events and power tool use, with 7,500 starting watts and 6,000 running watts (gas).
Both variants are designed to run either on gasoline or LP gas fuel.
The generators are driven by Generac OHV engines, which deliver constant power for a variety of applications and have a simple dual-fuel dial that allows customers to choose between gasoline and LP gas. For simple travel, these include a steel frame and a compact design with integrated wheels and a handle.
The generators are equipped with innovative co-sense technology that enables them to shut down if the surrounding carbon monoxide levels become dangerous.
Headquartered in Waukesha WI, Generac is a leading manufacturer of power generation equipment, energy storage systems and other power products — including portable, residential, commercial and industrial generators. In addition, the company manufactures light towers, which provide temporary lighting solutions for various end markets, and commercial and industrial mobile heaters and pumps used in the oil & gas, construction and other industrial markets.
GNRC reported first-quarter 2022 adjusted earnings of $2.09 per share, which beat the Zacks Consensus Estimate by 10%. However, the bottom line declined 12.2% year over year.
Net sales increased 41% year over year to $1.14 billion and beat the consensus mark by 4.9%. Robust demand for Residential and Commercial & Industrial products and effective M&A strategies boosted Generac’s first-quarter performance.
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>>> Generac (GNRC) Launches EV Charging Solution for Utilities
Zacks Equity Research
May 16, 2022
https://finance.yahoo.com/news/generac-gnrc-launches-ev-charging-155903142.html
Generac Power Systems’ GNRC subsidiary, Generac Grid, rolled out electric-vehicle charging solutions for utilities and EV owners.
The company’s EV charging solutions, including Geotab telematics, are now accessible worldwide.
The utility-focused product is powered by Geotab telematics technologies to empower EV owners of most makes and models to take control of their car charging. It also provides utilities with vital monitoring data supplied directly from a Geotab GO device that is installed in the vehicle's onboard diagnostic port.
Through its telematics solutions, Geotab provides secure and reliable data acquired from electric vehicles. According to Generac Grid Services, EVs are a critical distributed energy resource to shift load to capture low-carbon, clean energy and manage peak demand, which will play a key factor in decarbonizing the transportation sector.
Generac Grid Services is using its comprehensive utility program design experience (including Geotab telematics offerings) to deliver a variety of solutions to the utilities to aid them at every stage of their EV strategy rollouts, like monitoring to behavioral response, smart charging, and advanced vehicle-to-home and vehicle-to-grid solutions.
The charging data can be used by monitoring programs to help with grid planning and rate design. In contrast, behavioral programs can use charging data insights combined with strategic consumer messaging and incentives to impact long-term charging habits.
Further, EV drivers can avail financial incentives by enrolling in various utility schemes that leverage data streaming from the Geotab GO gadget. Data from Geotab GO can provide information regarding rate structures, utility system planning, regulatory requirements, and the verification of participation in smart-charging programs and events added Generac.
Generac Grid Services maintains agreements with EV charging station manufacturers to offer new smart charging options in addition to supplying vehicle-side data through Geotab telematics systems.
For example, Generac Grid Services ensures that the signal is received by Concerto (Generac's real-time energy-balancing platform) by sending a signal directly to EV chargers instructing them to start or stop charging, and it also works with charger manufacturers. By combining both solution types, Generac supplies programming that supports major charging station providers and more than 220 EV models from all class sizes (including light to heavy-duty electric cars).
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Generac - >>> Higher prices, slower economy don't dampen Generac's red-hot home standby generator sales: Jagdfeld
Demand for Generac's standby generators exceeded executives’ expectations during the company's first quarter.
By Rich Kirchen
Milwaukee Business Journal
May 6, 2022
https://www.bizjournals.com/milwaukee/news/2022/05/06/higher-prices-dont-dampen-generacs-red-hot-home.html?ana=yahoo
Generac Power Systems implemented price increases on its home standby generators the past year or so, but homeowners continue showing strong demand that president and CEO Aaron Jagdfeld believes would continue if the economy slows.
Generac (NYSE: GNRC) raised prices on the standby generators in the “upper teens” percentages the past 15 to 18 months, Jagdfeld told analysts this week. The Waukesha-based company plans another price increase effective June 1.
The price increases have covered part of Generac’s higher costs for raw materials, logistics and labor, Jagdfeld said during a May 4 analyst call. Demand has exceeded executives’ expectations and Generac saw higher-than-expected shipments of the home standby generators for the quarter ending March 31, he said.
The all-in price for installing a home standby generator used to be $9,000 to $10,000 and now has increased to $11,000 to $11,500, Jagdfeld said. The Generac product itself is "maybe half of the total cost of the project," he said.
The extra expense “doesn’t seem to be dampening the enthusiasm for demand for the category,” Jagdfeld said.
The strength in home standby generator sales is driven by continuing trends in which homeowners are seeking resiliency in their power sources, Jagdfeld said.
“The category is incredibly durable with respect to the demand and with respect to the impact from pricing,” he said.
Jagdfeld pointed to the 2008-2009 recession as an example of the durability of the demand.
“Our overall consumer or residential business was up even in the depths of that,” Jagdfeld said. “And I think if anybody would have said that, that category would be up — kind of a large ticket kind of arguably discretionary product tied to residential investment — I think most people would have said, ‘You're kind of nuts.’ But we actually did outperform.”
Homeowners' standby generator projects fall into the category of home improvement, Jagdfeld said.
“Think of it as the impact of the price of that product in relation to the home's value,” he said. “A lot of home values are way up. So when you think about it in the context of as a percentage of the home's value, it's not up significantly at all.”
Robert W. Baird & Co. analyst Mike Halloran said in an investment update that Generac’s price increases raise questions “around friction with channel partners” who have to either pass along price increases to customers or absorb the higher prices. Generac executives said the push back has been less than they anticipated, Halloran said.
Generac reported sales increased 41%, to $1.14 billion, for the quarter ending March 31 compared with $807 million in the same quarter a year earlier.
The company’s adjusted net income decreased to $113.9 million, or $2.09 per share, from $149 million, or $2.38 per share a year ago. The per-share profits exceeded the analyst consensus of $1.92.
The heavy demand has caused the backlog to grow for Generac home standby generators to over $1 billion, executives said. However, the company’s production levels have increased at its Wisconsin and South Carolina plants, which enabled Generac to reduce lead times to 20 weeks from 27 weeks as of year-end 2021.
Generac is seeing some moderation in increases of commodity costs. The company is a big user of steel, copper and aluminum with steel remaining elevated and copper moderating, said chief financial officer York Ragen.
The company increased its full-year 2022 net sales guidance to an increase of between 36% and 40%. Generac previously predicted sales would increase 32% to 36% this year.
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>>> Steel Dynamics, Inc. (STLD), together with its subsidiaries, operates as a steel producer and metal recycler in the United States. It operates through three segments: Steel Operations, Metals Recycling Operations, and Steel Fabrication Operations. The Steel Operations segment offers hot roll, cold roll, and coated steel products; parallel flange beams and channel sections, flat bars, large unequal leg angles, and reinforcing bars, as well as standard strength carbon, intermediate alloy hardness, and premium grade rail products; and engineered special-bar-quality products, merchant-bar-quality products, and other engineered round steel bars. The company also engages in turning, polishing, straightening, chamfering, threading, precision saw-cutting, and heat treating of bar products; and cutting to length, straightening, hole punching, shot blasting, welding, galvanizing, and coating of specialty products. Its products are used in construction, automotive, manufacturing, transportation, heavy and agriculture equipment, and pipe and tube markets. This segment sells directly to end-users, steel fabricators, and service centers. The Metals Recycling Operations segment purchases, processes, and resells ferrous and nonferrous scrap metals into reusable forms and grades. Its ferrous products include heavy melting steel, busheling, bundled scrap, shredded scrap, steel turnings, and cast-iron products; and nonferrous products comprise aluminum, brass, copper, stainless steel, and other nonferrous metals. This segment also provides transportation logistics, marketing, brokerage, and scrap management services. The Steel Fabrication Operations segment produces non-residential steel building components, such as steel joists, girders, trusses, and steel deck products. The company also exports its products. Steel Dynamics, Inc. was incorporated in 1993 and is headquartered in Fort Wayne, Indiana. <<<
>>> 3 Top Stocks to Buy During a Sell-Off
Motley Fool
By Reuben Gregg Brewer -
Mar 17, 2022
https://www.fool.com/investing/2022/03/17/3-top-stocks-to-buy-during-a-sell-off/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Steel Dynamics is a fast-growing steelmaker that is following a well-honed playbook.
1. Steel Dynamics: Smaller, but growing faster
Steel stocks are extremely expensive today, as they put up record-breaking results. That includes Steel Dynamics ( STLD 8.07% ), which is a relative newcomer compared to industry giant Nucor and iconic United States Steel.
That said, the company's production is built on electric arc mini-mills (like Nucor's fleet) that are more flexible than blast furnaces, which are a big piece of U.S. Steel's business. This is an important distinction because Nucor has long been the industry's leading name.
So why not buy Nucor in a sell-off? Well, you could, and you'd likely be happy doing so. But Steel Dynamics was co-founded by an ex-Nucor employee and uses its "stepsister's" playbook to a large degree. However, with a market cap of around $14 billion, it is less than half the size of Nucor. That means it takes less investment to move the top and bottom lines significantly. And this in turn gives Steel Dynamics a stronger growth outlook.
One place where that's shown up is on the dividend front, where Steel Dynamics' dividend has grown at an annualized clip of roughly 10% over the past decade, compared to the low-single-digit annualized dividend growth at Nucor over the same time span.
If you are on the lookout for a steel name and are focused on dividend growth, Steel Dynamics is probably the best name for your bear market wish list.
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>>> Generac Stock Is Spiking. It Expects ‘Exceptional Revenue Growth’ in 2022.
Barron's
By Sabrina Escobar
Feb. 16, 2022
https://www.barrons.com/articles/generac-gnrc-stock-earnings-revenue-forecast-51645020931?siteid=yhoof2
Shares of Generac Holdings GNRC-2.66% were surging Wednesday after the generator maker’s 2022 outlook energized investors.
“The company is initiating guidance for 2022 that anticipates another year of exceptional revenue growth as compared to the prior year,” the company said on Wednesday in its fourth-quarter earnings release.
Generac said it believes net sales will increase between 32% and 36% from the previous year, driven by increasing home standby production capacity, growth in clean energy markets, recent acquisitions, and strong global demand. The net income margin is expected to be approximately 13% to 14% for 2022.
Investors also cheered the company’s solid fourth-quarter performance. Generac reported adjusted earnings of $2.51 a share on $1.07 billion in revenue. Analysts surveyed by FactSet were expecting earnings of $2.42 a share on revenue of $1.02 billion.
For the fiscal year, net sales increased 50% to a record $3.75 billion in 2021, topping forecasts for $3.69 billion. Adjusted earnings were $9.63 a share, beating estimates for $9.59.
“We’re proud of our execution during the quarter as the continued progress on our capacity expansion helped drive top line results ahead of our expectations despite ongoing supply chain challenges,” said CEO Aaron Jagdfeld.
Generac’s gross profit margin was 34% for the quarter, compared to 39.4% in the year-earlier quarter. Margins were compressed by supply-chain constraints and inflationary pressures that drove up prices for commodities, labor, logistics, and starting up new plants. The costs were partially offset by pricing changes that were first implemented last year and will be fully realized throughout 2022, the company said.
Domestic sales increased 39%, while international sales increased 47%, with acquisitions contributing about 21% of revenue growth in the segment for the quarter.
Generac shares were rising 12.2% to $310.46 on Wednesday.
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>>> Here's What General Electric's Big Split Means For Investors
Let's dig into the details of the conglomerate's major announcement earlier this week.
Motley Fool
by Lee Samaha
Nov 13, 2021
https://www.fool.com/investing/2021/11/13/what-general-electric-big-split-means-investors/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Key Points
The three-way split will create much more focused companies.
The new companies will be more able to engage in mergers and acquisitions.
The question of just how much debt each company will carry after the breakup has yet to be answered.
General Electric (NYSE:GE) surprised the market earlier this week by announcing its intent to divide itself into three companies. The plan makes sense and should result in a significant release of value for investors, but there's still some risk attached. Here's the lowdown.
Two reasons why the breakup makes sense
First, following the breakup, each of the newly public offspring companies could trade at higher valuation multiples than they would be credited with as parts of the current GE due to what's now called the "conglomerate discount."
That's not how it used to be. Conglomerate stocks once commanded a valuation premium, reflecting the attractiveness of a company with diverse revenue streams that could generate earnings across a range of market conditions. However, with the advent of exchange-traded funds (ETFs), it has become much easier for investors to get exposure across various industries and sectors with just a few investments.
Second, once they are broken up into separate parts, the new companies should be run better. During the investor update, CEO Larry Culp argued that the post-split companies would have better "focus" and "more tailored capital structures and capital allocation frameworks that are aligned with each company's distinct strategies and industry dynamics."
That argument makes sense because bond investors may be more willing to invest in, say, a stand-alone healthcare company than they would if it was part of GE. Similarly, heavy investment in developing aircraft engines, for example, might be held back by management because of financial difficulties at other parts of GE.
What General Electric will do
The key points of the plan are as follows:
GE Healthcare will be spun off in early 2023, with GE retaining a 19.9% stake.
The GE Power, GE Renewable Energy, and GE Digital units will be put together and spun off in 2024.
The remaining GE will be an aviation-focused company.
The process will result in one-time separation costs of $2 billion.
GE's stakes in AerCap, Baker Hughes, and the (post-split) GE Healthcare will give the company the financial flexibility to ensure that its renewable energy and power business can also have an investment-grade capital structure when it's spun off.
It makes sense for GE Digital to be included with the power and renewable energy businesses because its main focus is on energy right now. For example, digital services and Internet of Things (IoT) capabilities are used to gather vast amounts of data that are used to more effectively service GE's wind and gas turbines. At the same time, IoT improves the utilization of the electricity grid.
Which spinoff gets what debt?
As for the difficult question of which company will get what debt, management plans for all three companies to have investment-grade capital structures -- although it will, of course, be up to the rating agencies to ultimately decide if a company is "investment grade" or not. That said, the definition usually implies a net-debt-to-EBITDA (earnings before interest, taxation, depreciation, and amortization) ratio of 2.5 or less.
A quick look at the numbers from the industrial businesses reveals the nature of the problem. The healthcare and aviation businesses have tended to generate much more EBITDA.
Moreover, management's assumptions for 2023 call for operating profits of $6 billion at GE Aviation, around $3 billion to $4 billion at GE Healthcare, and $1 billion to $2 billion at GE Power. Management's implied assumption for GE Renewable Energy is for zero operating profits.
It all leads to the question of just what kind of debt load the power and renewable energy business will have. That's a pertinent question given that management's previous guidance called for net debt of $33 billion to $37 billion in 2023.
Of course, the answer won't come until the spinoff, and GE has a couple of years to improve earnings at power and renewable energy. Meanwhile, as noted above, its ownership stakes in Baker Hughes, AerCap, and GE Healthcare will give it some financial flexibility before management has to make the final decision in 2024.
A smart plan, but there are still risks
Power and renewable energy are complementary businesses that serve the electricity generation industry. Healthcare has little overlap with the rest of GE's businesses, and companies in that sector tend to command high valuations. They are also popular in the capital markets. Aviation stocks tend to command high multiples that reflect their long-term growth potential.
The one caveat is that GE will have to meet its target of $13 billion to $14 billion in EBITDA in 2023 and get reasonable prices on any sales of assets to ensure all three companies will have investment-grade debt ratings. As such, this plan does carry some risk. Still, based on management's targets, the breakup is good news for investors and should be welcomed.
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>>> Generac (GNRC) Boosts Energy Offerings With Smart Grid Ready
Zacks Equity Research
August 26, 2021
https://finance.yahoo.com/news/generac-gnrc-boosts-energy-offerings-123412985.html
Generac Holdings Inc. GNRC has announced that its home standby generators, commercial generators and PWRcell solar + battery storage systems are being built as Smart Grid Ready.
The move allows its customers to sell power back to the grid and offset their energy expenses. The Smart Grid Ready capabilities are being offered through Generac’s Enbala Concerto platform.
The Enbala Concerto energy-balancing platform provides an approach for creating controllable energy resources from loads, energy storage and renewable energy sources. It gives energy retailers and utilities the flexibility to operate in real-time and better manage the complexities of variable energy assets.
Generac’s shareholders’ money has more than doubled over the past year. The stock has risen 128.2% in this time frame compared with the industry’s growth of 68.2%.
The integration allows Generac’s customers to make contributions to grid reliability and sustainability. Climate change and an aging electrical grid with frequent power outages are spurring growth opportunities for the company.
With Smart Grid Ready, customers can play a crucial role in being part of the solution. They will have the chance to get additional return on investment by using Generac units to contribute energy to the grid and get payment for the excess power.
Through the new platform, Generac’s Smart Grid Ready products become distributed energy resources (DERs), which form virtual power plants — collections of DERs capable of boosting the grid services provided by traditional power generation. The DERs work as traditional power backup devices and enable the sale of power back to the grid during peak demand.
Generac boasts an end-to-end solution that combines solar, battery storage, generators and load management. The current PWRcell and home standby generator customers will be able to access Generac’s Concerto platform via a firmware update.
In January 2021, Generac created a new business organization as part of its ‘Powering Our Future’ strategy. Named Energy Technology, it comprises all Generac’s businesses, which mainly focus on products or services related to storage and energy management products.
Generac is currently a Zacks Rank #3 (Hold) stock.
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>>> Generac Announces Further Expansion in Waukesha County
Yahoo Finance
August 3, 2021
https://finance.yahoo.com/news/generac-announces-further-expansion-waukesha-204500385.html
Company Acquires Additional Site to Create New Customer Contact Center
WAUKESHA, Wis., Aug. 3, 2021 /PRNewswire/ -- Generac Power Systems, a leading global designer and manufacturer of energy technology solutions and other power products, today announced the expansion of its corporate operations into the Village of Pewaukee with the purchase of a new building. The new site, located adjacent to I-94 on Highway J, will serve as the Company's new Customer Contact Center. The 75,000 square-foot office building will house approximately 300 employees.
"Generac has experienced tremendous growth over the past decade as the combination of an aging grid and extreme weather are resulting in more frequent and longer lasting power outages, and that success has only intensified over the last 18 months with more people needing backup power at home where they're doing everything from working to learning to shopping," said Aaron Jagdfeld, president and CEO of Generac. "As we continue to add employees to serve our customers and support our rapidly evolving business, we have outgrown our current headquarters facility in Waukesha. Expanding to this new location will allow us to continue to grow Generac to serve our customers, partners and our people, as we work to meet the incredible market demand."
Generac Power Systems is investing more than $8 million to purchase and renovate the building located at W236N1402 Busse Road in the Village of Pewaukee. The new location will house key sales and support groups, as well as portions of the Company's marketing team. The Company closed on the new site on July 29, 2021 and will begin occupancy in August.
In addition to the new location in Pewaukee, Generac opened a new plant in Trenton, South Carolina earlier this year to increase the Company's capacity to meet growing demand for Generac's home standby generators. Furthermore, within the last month, Generac opened additional offices in Denver and Boston to accommodate tremendous growth in demand for Clean Energy products.
The Company's global headquarters has been in Waukesha, WI since 1959 and will remain its primary location for corporate operations as well as research and development activities.
About Generac (NYSE: GNRC)
Founded in 1959, Generac is a leading global designer and manufacturer of a wide range of energy technology solutions and other power products. As an industry leader serving residential, light commercial, and industrial markets, Generac's products and solutions are available globally through a broad network of independent dealers, distributors, retailers, e-commerce partners, wholesalers and equipment rental companies, as well as sold direct to certain end user customers. For more information about Generac and its products and services, visit Generac.com.
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The World's First Small Nuclear Reactor Is Now Under Construction
https://www.zerohedge.com/energy/worlds-first-small-nuclear-reactor-now-under-construction
China National Nuclear Corporation (CNNC) launched on Tuesday the construction of the first onshore small nuclear reactor in the world, in its efforts to gain a leading position in the modular reactors market.
Construction began on the demonstration project at the Changjiang Nuclear Power Plant in the Hainan province in southern China, local publication Global Times reports.
The start of the construction for the ‘Linglong One’ small nuclear reactor comes four years later than initially planned, due to delays in regulatory clearances, Reuters notes.
The small reactor was originally planned to see the start of the construction phase in 2017.
A year earlier, the Linglong One small reactor had become the first to pass a safety review from the International Atomic Energy Agency (IAEA).
Once completed and commissioned, the small nuclear reactor is expected to meet the annual power needs of around 526,000 households, Global Times reports, without giving a timeline for the completion.
CNNC has been developing small reactor technology for the past ten years, the outlet says.
According to the World Nuclear Association, interest is growing in small and simpler technology to generate nuclear power, due to lower costs and the desire to provide power away from large grid systems.
“Overall SMR research and development in China is very active, with vigorous competition among companies encouraging innovation,” the association says, noting that the U.S., the UK, and Canada also develop and support their respective domestic small reactor technology.
In the United States, Advanced Small Modular Reactors (SMRs) are a key part of the Department of Energy’s goal to develop safe, clean, and affordable nuclear power options, DOE says. The Department has provided support to the development of light water-cooled SMRs, which are under licensing review by the Nuclear Regulatory Commission (NRC) and will likely be deployed in the late 2020s to early 2030s.
Generac - >>> Bronstein, Gewirtz & Grossman, LLC Notifies Shareholders of Generac Holdings Inc. (GNRC) Investigation
Yahoo Finance
August 2, 2021
https://finance.yahoo.com/news/bronstein-gewirtz-grossman-llc-notifies-233000505.html
NEW YORK, NY / ACCESSWIRE / August 2, 2021 / Bronstein, Gewirtz & Grossman, LLC is investigating potential claims on behalf of purchasers of Generac Holdings Inc. ("Generac" or the "Company") (NYSE:GNRC). Investors who purchased Generac sharesare encouraged to obtain additional information and assist the investigation by visiting the firm's site: www.bgandg.com/gnrc.
The investigation concerns whether Generac and certain of its officers and/or directors have violated federal securities laws.
On July 29, 2021, Generac issued a recall of certain models of the Company's portable generators, citing reports of seven finger amputations and a finger-crushing incident. On this news, Generac's stock price $31.04 per share, or 7.2%, over three trading sessions, closing at $400.00 per share on August 2, 2021.
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Yes, with GNRC the 50 MA turned out to be the exact bottom on Wednesday. Today and yesterday the support was the lower Bollinger band (~ 415), but that also happens to be right near the current 34 MA (417).
I mainly just use the 50 and 200 MA, plus the Bol bands (the middle Bol band = 20 MA). So this keeps it simple, and these seem to be be the most commonly used reference points by Wall Street, along with the 100 MA.
In addition I use the previous highs and lows, plus candlestick patterns, and the common chart patterns like head + shoulders, ascending triangle, etc. Then there are the main indicators RSI and MACD, plus I use Full Stoch, CCI, and the Vortex indicator to help determine tops/bottoms.
But there's still a lot of guesswork, and I'm still learning. I haven't been doing much trading lately. After a great 2020/21, no sense giving it back :o) Most of those gains came from buy/hold, the market had gotten so cheap last year it was easy to just load up and stay long. But not so easy now.
GNRC, interesting how the 34 and 50 day MA'a were a factor in each of the last days trading
>>> Generac Earnings Soar; This Climate Change Stock Is a Buy
Generac stock is up 90% in 2021, but has a long runway for growth stemming from the effects of climate change and the global transitioning to clean energy.
Motley Fool
Beth McKenna
Jul 29, 2021
https://www.fool.com/investing/2021/07/29/generac-earnings-soar-this-climate-change-stock-is/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Key Points
Year-over-year revenue and adjusted EPS surged 68% and 71%, respectively.
Management raised 2021 revenue guidance by about 6%.
Generac Holdings (NYSE:GNRC), which makes backup power generators and other energy technology solutions, reported powerful second-quarter 2021 results before the market open on Wednesday.
Shares opened more than 7% lower on Wednesday, but climbed back and closed down just 1.8%.
The drop in the stock likely mostly stems from some investors (or at least short-term traders) focusing on what they viewed as a hiccup in the report, which overall was stellar. However, a portion of the decline can probably be attributed to recent market dynamics, as the market has struggled during the last couple of days.
The stellar features of the report include Q2 revenue and earnings beating Wall Street's expectations, and management solidly raising full-year 2021 revenue guidance. The minor blip was management slightly lowering its 2021 outlook for the profitability metric it provides.
In 2021 to date (July 28), Generac stock is up 89.5% compared the S&P 500's 18.1% return. (A five-year stock chart follows below to show the bigger picture.)
Generac's key numbers
Metric
Q2 2021
Q2 2020
Change
Revenue
$920 million
$547 million
68%
GAAP operating income
$183 million $90 million 103%
GAAP net income
$127 million
$66 million 92%
Adjusted net income
$153 million $88 million 74%
GAAP earnings per share
$2.01 $1.02 97%
Adjusted EPS
$2.39 $1.40 71%
DATA SOURCE: GENERAC. GAAP = GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
Revenue and adjusted earnings set all-time quarterly records. Given the company was founded in 1959 (it went public in 2010), such records are particularly impressive.
The company's "core sales" grew a robust 64% year over year. (This metric excludes the impact of acquisitions and foreign currency exchange).
Wall Street was looking for adjusted EPS of $2.31 on revenue of $863 million, so the company comfortably surpassed both expectations.
Granted, Generac had relatively easy year-over-year comparables, as the pandemic hurt its commercial and industrial business in the year-ago period. Nonetheless, even taking into consideration the modest growth in the year-ago period (year-over-year sales and adjusted EPS rose 1% and 17%, respectively), the Q2 2021 performance was still strong.
Cash flows were solid. Cash flow from operations was $122 million, up 20% year over year. Free cash flow was $96 million, up 8%.
Sales breakdown by product class and geography
Product class:
Residential product sales rocketed 76% year over year to $600 million.
Commercial and industrial product sales surged 64% to $254 million. (These categories don't add up to the company's total revenue because there is a relatively small "other" category, which accounted for about 7% of sales.)
Geographic segment:
Domestic sales soared 70% year over year to $784.1 million, with acquisitions made over the last year contributing about 2% of growth.
International sales (which consist primarily of commercial and industrial products) jumped 58% to $135.8 million, and core growth was about 45%.
What the CEO had to say
Here's much of what CEO Aaron Jagdfeld had to say in the earnings release:
Second quarter results were again exceptional... We are particularly proud of achieving this tremendous top-line growth along with a record level of adjusted EBITDA [earnings before interest, taxes, depreciation, and amortization] despite numerous supply chain challenges.
Shipments of home standby generators were almost double compared to the prior year due to incredible demand for these products and our successful capacity-expansion efforts. Our PWRcell energy storage systems were also up dramatically compared to the prior year as well as sequentially. ... Additionally, shipments of C&I [commercial and industrial] products were up significantly over the prior year as we continue to see demand recover across a number of markets and geographies from the prior-year pandemic lows, with growth of these products now solidly above 2019 levels.
GNRC Chart
DATA BY YCHARTS.
Full-year 2021 guidance
Management increased its 2021 sales outlook but slightly lowered its profitability expectation. The main reasons for the sales guidance hike are the company's production of home standby generators at a better-than-expected rate, and the increasing demand for its energy storage systems.
The lowering of the net income margin metric was due to input costs expected to be higher than management previously projected because of rising commodities and logistics costs. Logistics costs are still elevated due to the pandemic.
Metric
New 2021 Guidance
Prior 2021 Guidance
Revenue growth YOY
47% to 50%
40% to 45%
Net income margin before deducting for non-controlling interests YOY 15.5% to 16% 16% to 17%
DATA SOURCE: GENERAC. YOY = YEAR OVER YEAR.
Revenue guidance includes about 3% of favorable impact from acquisitions and foreign currency exchange.
A stock to consider buying
In short, Generac's Q2 report was stellar. I encourage long-term investors to further explore this company. It's likely to get a stronger tailwind from the effects of climate change (increasing frequency and severity of power outages due to extreme weather events) and the global transitioning to clean energy than Wall Street analysts have taken into account in their long-term growth projections, in my opinion.
Jagdfeld said on the earnings call that guidance doesn't include the potential for preemptive electric power shutoffs by utilities in any parts of the country. These shutoffs increase demand for the company's home standby generators. Over the last two years, utilities instituted multiday shutoffs several times across California during dry and windy weather to help lessen the potential for their equipment to contribute to the spread of wildfires.
In other words, if there are any pre-emptive power shutoffs through year-end, Generac's 2021 guidance will likely prove too conservative.
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>>> Generac Reports Record Second Quarter 2021 Results
Yahoo Finance
Generac Holdings Inc
July 28, 2021
https://finance.yahoo.com/news/generac-reports-record-second-quarter-100000083.html
Continued elevated demand and strong execution across the business drives exceptional revenue and earnings growth; 2021 outlook further increased
WAUKESHA, Wis., July 28, 2021 (GLOBE NEWSWIRE) -- Generac Holdings Inc. (NYSE: GNRC) (“Generac” or the “Company”), a leading global designer and manufacturer of energy technology solutions and other power products, today reported financial results for its second quarter ended June 30, 2021 and provided an update on its outlook for the full year 2021.
Second Quarter 2021 Highlights
Net sales increased 68% to a record $920 million during the second quarter of 2021 as compared to $547 million in the prior-year second quarter. Core sales growth, which excludes both the impact of acquisitions and foreign currency, increased approximately 64%.
Residential product sales grew 76% to $600 million as compared to $341 million last year.
Commercial & Industrial (“C&I”) product sales increased 64% to $254 million as compared to $155 million in the prior year.
Net income attributable to the Company during the second quarter was $127 million, or $2.01 per share, as compared to $66 million, or $1.02 per share, for the same period of 2020.
Adjusted net income attributable to the Company, as defined in the accompanying reconciliation schedules, was a record $153 million, or $2.39 per share, as compared to $88 million, or $1.40 per share, in the second quarter of 2020.
Adjusted EBITDA before deducting for noncontrolling interests, as defined in the accompanying reconciliation schedules, was a record $218 million, or 23.7% of net sales, as compared to $123 million, or 22.5% of net sales, in the prior year.
Cash flow from operations was $122 million, a record for the second quarter of a year, as compared to $102 million in the prior year. Free cash flow, as defined in the accompanying reconciliation schedules, was also a second quarter record at $96 million as compared to $89 million for 2020. The increase in cash flow was primarily due to higher net income in the current year quarter, which was partially offset by a higher level of income taxes paid and capital expenditures in the current year relative to the prior year quarter.
On June 1st, the Company closed on the acquisition of Deep Sea Electronics Limited, an advanced controls designer and manufacturer headquartered in Hunmanby, United Kingdom.
On July 2nd, the Company closed on the acquisition of Chilicon Power, LLC (“Chilicon”). Based in California, Chilicon is a designer and provider of grid-interactive microinverter and monitoring solutions for the solar market.
The Company achieved a significant milestone by starting production of home standby generators at its new manufacturing facility in Trenton, South Carolina in early July.
“Second quarter results were again exceptional with broad-based growth of 68% leading to all-time record revenue of $920 million. We are particularly proud of achieving this tremendous top-line growth along with a record level of adjusted EBITDA despite numerous supply chain challenges,” said Aaron Jagdfeld, President and Chief Executive Officer. “Shipments of home standby generators were almost double compared to the prior year due to incredible demand for these products and our successful capacity-expansion efforts. Our PWRcell® energy storage systems were also up dramatically compared to the prior year as well as sequentially as these products continued to gain important traction in the rapidly expanding clean energy market. Additionally, shipments of C&I products were up significantly over the prior year as we continue to see demand recover across a number of markets and geographies from the prior-year pandemic lows, with growth of these products now solidly above 2019 levels.”
Jagdfeld continued, “We recently announced two strategic acquisitions we believe will enable us to expand our capabilities and accelerate our strategy to continue Generac’s transition into an energy technology solutions company. In June, we closed on the acquisition of Deep Sea Electronics, which will improve our expertise and bandwidth for advanced systems controls and help us more quickly develop our product roadmap for the future. In early July, we further added to our suite of clean energy solutions by entering the large and growing microinverter market for solar applications with the acquisition of Chilicon Power.”
Additional Second Quarter 2021 Consolidated Highlights
Gross profit margin was 36.9% as compared to 38.2% in the prior-year second quarter. The current quarter’s margin performance was impacted by higher input costs relating to raw materials, labor, logistics and plant start-up costs, which was partially offset by improved pricing along with favorable overhead absorption from higher sales volumes.
Operating expenses increased $37.4 million, or 31.3%, as compared to the second quarter of 2020. The increase was primarily driven by higher variable expenses from the significant increase in sales volumes, higher employee costs and incentive compensation, and the impact of acquisitions.
Provision for income taxes for the current year quarter was $46.4 million, or an effective tax rate of 26.6%, as compared to $18.5 million, or a 22.5% effective tax rate, for the prior year. The increase in effective tax rate was primarily due to a discrete tax item resulting from a legislative tax rate change in a foreign jurisdiction which revalued deferred tax liabilities by $7.0 million, or approximately 4% tax rate impact, during the current year quarter.
Business Segment Results
Domestic Segment
Domestic segment sales increased 70% to $784.1 million as compared to $460.8 million in the prior year quarter, with the impact of acquisitions contributing approximately 2% of the revenue growth for the quarter. The core sales growth was driven by broad-based strength across both residential and C&I products highlighted by very strong growth with home standby generators, PWRcell® energy storage systems, telecom national account customers and C&I mobile products.
Adjusted EBITDA for the segment was $203.9 million, or 26.0% of net sales, as compared to $121.3 million in the prior year, or 26.3% of net sales. This margin performance was impacted by higher input costs in the current year quarter, which were mostly offset by improved pricing and higher operating leverage from the substantial revenue growth for the segment during the quarter.
International Segment
International segment sales increased 58% to $135.8 million as compared to $86.1 million in the prior year quarter, with the impact of acquisitions and foreign currency contributing approximately 13% of the revenue growth for the quarter. The core sales growth for the segment was primarily due to strength in the European and Latin American regions that are seeing a sharp increase in demand as end markets recover off the prior-year COVID lows.
Adjusted EBITDA for the segment, before deducting for noncontrolling interests, was $13.7 million, or 10.1% of net sales, as compared to $1.9 million, or 2.2% of net sales, in the prior year. The increase in margin was primarily due to improved operating leverage on the higher sales volumes and the impact of the Deep Sea Electronics acquisition.
Updated 2021 Outlook
The Company continues to expand its production of home standby generators at a better-then-expected rate, and demand for PWRcell® energy storage systems continues to increase combined with additional supply chain execution, which is leading to further increase in the shipment outlook for these products for the full-year 2021. The outlook for C&I products has also improved due to a further broad-based rebound in demand highlighted by a continued pickup in activity from telecom national account customers, overall stronger outlooks for domestic and international markets and the closing of the Deep Sea Electronics acquisition. However, the Company continues to experience higher input costs relative to our previous guidance due to rising commodities and significantly higher logistics costs.
As a result of these factors, the Company is increasing its full-year 2021 net sales growth guidance to now be approximately 47 to 50% compared to the prior year, which includes approximately 3% of favorable impact from acquisitions and foreign currency. This is an increase from the as-reported growth guidance of 40 to 45% previously expected.
Net income margin, before deducting for non-controlling interests, is now expected to be approximately 15.5 to 16.0% for the full-year 2021 as compared to the prior expectation of between 16.0 to 17.0%. The corresponding adjusted EBITDA margin is now expected to be 24.5 to 25.0%, as compared to the previous guidance range of approximately 24.5 to 25.5%.
Operating and free cash flow generation is still expected to be strong, with the conversion of adjusted net income to free cash flow still expected to be approximately 90%.
Conference Call and Webcast
Generac management will hold a conference call at 10:00 a.m. EDT on Wednesday, July 28, 2021 to discuss second quarter 2021 operating results. The conference call can be accessed by dialing (866) 415-3113 (domestic) or +1 (678) 509-7544 (international) and entering passcode 1966865.
The conference call will also be webcast simultaneously on Generac's website (http://www.generac.com), accessed under the Investor Relations link. The webcast link will be made available on the Company’s website prior to the start of the call within the Events section of the Investor Relations website.
Following the live webcast, a replay will be available on the Company's website. A telephonic replay will also be available approximately two hours after the call and can be accessed by dialing (855) 859-2056 (domestic) or +1 (404) 537-3406 (international) and entering passcode 1966865. The telephonic replay will be available for 7 days.
About Generac
Founded in 1959, Generac is a leading global designer and manufacturer of a wide range of energy technology solutions and other power products. As an industry leader serving residential, commercial, and industrial markets, Generac's products and solutions are available globally through a broad network of independent dealers, distributors, retailers, e-commerce partners, wholesalers and equipment rental companies, as well as sold direct to certain end user customers.
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GNRC, nice 4 year gain too, from about $35 to $430. 3X gain the lasr=t 12 months.
>>> Why Generac Stock Surged 82.6% in the First Half of 2021
The backup power generator is uniquely positioned to profit in the current environment.
Motley Fool
by Lee Samaha
Jul 14, 2021
https://www.fool.com/investing/2021/07/14/why-generac-stock-surged-826-in-the-first-half-of/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Key Points
Generac has been a beneficiary of the power outages in Texas.
Management has already upgraded guidance in 2021.
The company is a long-term play on the rise of solar power.
What happened
Backup power generation equipment manufacturer Generac Holdings (NYSE:GNRC) soared a remarkable 82.6% in the first half of 2021, according to data from S&P Global Market Intelligence. The move follows a remarkable 252% rise in the stock over the last year.
Just about everything is going right for the company right now. If it isn't the stay-at-home measures encouraging spending on the home (Generac generates 65% of its sales to residential customers), it's power outages in Texas leading to a pickup in demand for standby generators. In addition, California has suffered power shutoffs to guard against the risk of wildfires. Moreover, Generac is a beneficiary of the movement toward renewable energy due to its energy storage batteries.
It all comes together to produce a robust outlook for 2021. On the first-quarter earnings call in April, management outlined expectations for revenue to grow by 40% to 45% in 2021, with residential products growing at a rate of over 50%. For reference, the previous guidance was for a 25% to 30% increase.
It's all driven by a better U.S. outlook as domestic sales increased 84.2% to $692.7 million in the first quarter, whereas international sales "only" grew 14.8% to $114.7 million.
So what
Generac has a bright future. The energy transition creates demand for energy storage, and the variable nature of renewable energy means backup generators have a crucial role to play.
That said, there's a feeling that a lot of the good news is already included in the price. For example, the company now trades on nearly 40 times its estimated 2022 earnings, and 44 times estimated 2021 earnings. Also, there's no guarantee that future inclement weather will produce the sort of power outages experienced this year.
Now what
As ever with richly rated stocks, the question is whether the company can keep surprising investors to the upside. The good news is you won't have to wait long to find out -- second-quarter earnings are due on July 28. Generac may well have to raise guidance again to keep investors happy. Still, any sell-off in the stock should be considered an opportunity to buy into a very attractive long-term story.
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>>> Generac (GNRC) Enters Microinverter Space With Chilicon Buyout
Zacks Equity Research
July 7, 2021
https://finance.yahoo.com/news/generac-gnrc-enters-microinverter-space-133501909.html
Generac Holdings Inc. GNRC have forayed in to the microinverter market with the acquisition of Chilicon Power, LLC for an undisclosed amount. The transaction is likely to expand its suite of clean energy products and augment its leading position in the market.
Based in Pacific Palisades, CA, Chilicon designs and manufactures grid-interactive inverter systems and monitoring solutions and reportedly builds the world's highest efficiency 60-cell module inverter. Its highly scalable technology offers simple yet powerful and robust microinverter solutions that boast key intelligence to power residential or business operations from AC coupling to battery storage and generators with the push of a button. In particular, its power inversion and monitoring system technology maximizes PV system production, lowers installation cost and promotes end-user satisfaction.
The acquisition expands Generac’s solar and storage product offerings as significant changes in the energy landscape, drastic climate change, aging power infrastructure and deployment of superfast 5G technology spur secular growth opportunities. The company aims to capitalize on these key growth drivers by generating more sales through higher market penetration and continued focus on research and development. A diversified distribution channel further ensures that the products reach a broad global customer base. Notably, the company has the largest network of factory direct independent generator dealers in the industry in North America.
With more than six decades of industry experience and technology knowhow, Generac is one of the leading manufacturers of home backup generators, offering the widest range of power products in the marketplace for diversified end users. The company intends to leverage its experience and core competencies to strengthen its position in the emerging residential energy storage and monitoring markets. While its Mobile Link remote monitoring capability offers a Wi-Fi-enabled feature to conveniently check the status of a generator online and receive maintenance and service alerts, the “Fleet” feature enables its distribution partners to monitor the installed base of customers for a more proactive service experience. Such a comprehensive product portfolio and service capabilities augur well for the long-term growth of the company.
Generac intends to diversify its business model from being solely ‘‘equipment centric’’ to a systems and services provider through connectivity solutions and subscription-based applications, with emphasis on improving the end-user experience and helping customers lower utility costs. This, in turn, is likely to help unlock new business opportunities and generate steady revenues from subscriptions and spare parts. The company leverages data obtained from connected devices by developing predictive analytics that help in continuously improving product quality, sales processes and tools, energy optimization, aftermarket penetration, customer experience and alignment with dealers. In addition, the company pursues potential acquisition opportunities to monetize an ecosystem of devices that relate to energy use, storage, generation, control and optimization to further strengthen its leading market position. This holistic growth strategy offers a competitive advantage to Generac against other firms.
In addition, Generac’s products are well suited to accelerate the transition from traditional fossil fuel to clean environment-friendly natural gas. The emergence of low cost, environment-friendly natural gas generators have helped to increase the penetration of standby generators over the past decade in the light commercial market. Moreover, low and stable natural gas prices offer an enticing opportunity to end users to reduce utility bills by using renewable energy solutions. An aging population and increased cases of power outages due to inclement weather conditions and catastrophic events like wildfires have amplified the importance of backup power for critical infrastructure facilities. In addition, a large installed base of backup power for essential telecommunications infrastructure for the rollout of next-generation 5G wireless networks has enabled the uninterrupted flow of critical communications and other voice and data services.
Amid such positive growth drivers, the buyout is further likely to strengthen its competitive position in the market. Shares of Generac have surged 239.2% over the past year compared with the industry’s growth of 151.4%.
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Another way to find gold and treasure -
Generac - >>> Wall Street Is Lighting a Fire Under These 2 Stocks
On a mixed day for the stock market, a couple of favorites saw nice gains.
Motley Fool
Dan Caplinger
Jun 8, 2021
https://www.fool.com/investing/2021/06/08/wall-street-is-lighting-a-fire-under-these-2-stock/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Wall Street still has a huge amount of influence over stocks. Especially when it comes to day-to-day fluctuations, you can often attribute big gains or losses to what analysts have to say about a company.
On Tuesday, a couple of stocks stood out in getting attention from Wall Street pros. With the Dow Jones Industrial Average (DJINDICES:^DJI), S&P 500 (SNPINDEX:^GSPC), and Nasdaq Composite (NASDAQINDEX:^IXIC) all seeing modest gains on the day, the moves for Generac Holdings (NYSE:GNRC) and NextDecade (NASDAQ:NEXT) were notable and raised some eyebrows among market participants.
This powerful stock is heating up
Shares of Generac Holdings climbed more than 6% on Tuesday. The maker of backup generator equipment for residential and commercial customers earned some favorable comments from analysts looking for ways to play the summer storm season.
The positive views came from analysts at KeyBanc, who reaffirmed their price target of $400 per share on Generac. As they see it, the company trades at an attractive level compared to its past earnings and future prospects, especially given rising interest in its products to provide standby power for homes when grid power becomes unavailable. It's common at various points of the year for investors to start paying attention to Generac again, whether it's when winter storms hit or as hurricane and tornado season approaches in the late spring and summer months.
Solar energy storage is also a potential growth area for Generac. As more homeowners have seen the value of keeping their property in shape and in optimal condition during the pandemic, the value of Generac systems has gone up in the eyes of many.
With today's rise, Generac is among the few huge performers from 2020 that have regained nearly all of their losses in the past few months. The stock is now challenging record highs, and continued success in driving demand could be what pushes Generac over the top.
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Generac - >>> 3 Great Stocks for Low-Risk Investors
These companies with low-risk businesses will hold up over the long run.
Motley Fool
by Jim Crumly
Feb 28, 2021
https://www.fool.com/investing/2021/02/28/3-great-stocks-for-low-risk-investors/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
The average stock in the S&P 500 index is selling for 22 times earnings expected by analysts in the upcoming year, which is higher than at any time since the dot-com crash of 2000-2002. The market's valuation has some investors nervous now. If you're looking for stocks with lower risk, you're not alone.
No one really knows how the market will move next, but investors can avoid a lot of risk by simply being patient, buying stocks of strong businesses, and holding for the long term. The longer an investor holds shares, the more the quality of the business overshadows fluctuations in valuation.
Here are three high-quality stocks that should appeal to investors who want growth but are concerned about a downturn. The shares of these companies could go down in a market correction along with almost everything else, but their low-risk businesses should outperform in the long run, rewarding patient shareholders.
Abbott Laboratories
Healthcare stocks tend to be "defensive," meaning that their businesses tend to hold up well during downturns in the economy. Abbott Laboratories (NYSE:ABT) is one of the most consistent growth stocks you'll find in the sector. The highly diversified seller of medical devices, diagnostics, pharmaceuticals for emerging market countries, and nutrition products puts together one solid quarter after another and hasn't had an earnings disappointment in over a decade.
Abbott's fourth-quarter results got a big boost from COVID-19 testing. Sales growth of 28% over the period a year ago would be flat if you subtracted the $2.4 billion of sales related to coronavirus testing. But sales of routine diagnostics and medical devices were depressed during the quarter as medical procedures around the world dropped due to the late-year surge in the pandemic. Abbott thinks the demand for COVID-19 testing hasn't peaked yet and will remain strong beyond 2021. Meanwhile, a rebound in routine medical procedures will cause the rest of its business to bounce back, and sales of its FreeStyle Libre continuous glucose monitor are growing more than 40%.
Looking forward, Abbott expects 2021 earnings per share of $5.00, a level that analysts hadn't projected the company to hit until after 2023, and it thinks it will continue to grow profits from there, even after the pandemic. The company continued its streak of 49 years of dividend hikes when it recently boosted the payout by 25%, resulting in a yield of 1.5% and helping investors in this blue chip stock sleep at night.
Prologis
The pandemic accelerated the shift in retail from brick-and-mortar stores to e-commerce, and one consequence has been a boom in demand for warehouse space. That trend created a tailwind for Prologis (NYSE:PLD), a real estate investment trust that's the global leader in logistics real estate. Stable long-term cash flows had made the company an attractive choice for low-risk investors long before that.
Prologis owns almost a billion square feet of logistics real estate housed in 4,700 buildings in 19 countries. The value of the goods passing through its properties represents fully 2.5% of the world's gross national product. That produces a huge and stable base of rents that grows as space in key locations becomes more valuable and the company develops new properties. Core funds from operations per share grew 15% in 2020 and the dividend rose 9.4%, with shares now yielding 2.3%.
An economic recovery aided by stimulus checks and vaccines means that warehouse space will remain in high demand in 2021. Prologis says that inventory levels compared with sales are near record lows and that there are signs that businesses are restocking their inventories to prepare for higher consumer spending and more growth of e-commerce.
The pandemic exposed weaknesses in global supply chains, and Prologis thinks that long-term investments to position goods closer to consumers and make supply chains more resilient will result in incremental demand for 200 million square feet of logistics space in the U.S., a trend that will take several years to play out.
The strong trends fueling Prologis' growth and the durable nature of its cash flows make the business attractive to risk-averse investors.
Generac Holdings
A glance at a chart of the share price of Generac Holdings (NYSE:GNRC) over the last couple of years might lead you to believe that the company is a high-flying tech stock. Shares rose 226% in 2020 and are up 38% already this year. But the maker of industrial equipment for over 60 years is in the sweet spot of some important trends and gives investors the opportunity to tap into long-term growth with less risk than you'd have in many tech stocks.
Generac is the leader in backup generators for home and industrial use. Sales of those products surged during the hurricanes and wildfires of 2019, got a boost from the working-from-home trend in 2020, and will surely benefit from the massive grid failure in Texas this month. The aging U.S. electrical grid and a greater urge to invest in disaster readiness among consumers are powerful tailwinds for the business that should last for years. Residential sales boomed 55% in the fourth quarter, leading to 29% top-line growth and a 39% increase in net profit.
But Generac is moving into new markets in the energy security business that should open up important new opportunities for growth. The company has created a residential clean energy solution that combines solar power generation with high-capacity batteries, the industry's largest inverter for converting direct current to the alternating current that the grid uses, and a load management system. The company's PWRcell energy storage system keeps a whole home functioning off the grid during outages, and when integrated with generators later this year, will be able to keep a home powered indefinitely during grid failures. Sales went from zero to $115 million in 2020 and the company expects 50% to 75% growth in 2021.
Generac also has an opportunity during the global 5G roll-out to sell more power backup systems for cell tower installations, where it's the leader in market share in the U.S. Longer term, the company aspires to help utilities meet peak demand through "virtual power plants," the ability to remotely turn on commercial and residential standby generators and feed power back into the grid, earning income for their owners from assets that sit idle most of the time.
Shares of the stock aren't cheap at 37 times expected 2021 earnings, but Generac's dominance of its niche gives low-risk investors a rapidly growing but easy-to-understand business that has a long runway ahead.
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>>> Generac Expands Capacity With New Manufacturing and Distribution Facility
Yahoo Finance
February 10, 2021
https://finance.yahoo.com/news/generac-expands-capacity-manufacturing-distribution-160000194.html
Demand for power generation and new energy technologies has driven growth that requires increased production
WAUKESHA, Wis., Feb. 10, 2021 /PRNewswire/ -- Generac Power Systems today announced plans to open a new manufacturing, assembly, and distribution operation in Trenton, South Carolina. The facility will support increased demand for home standby generators and associated energy technologies, and serve as a distribution center to customers in the southeast part of the United States, creating approximately 450 new jobs over the next two years.
"With significant demand for Generac products across the country, we're excited to expand our operational capacity to accommodate the increased interest in residential power systems," said Aaron Jagdfeld, President and CEO of Generac Power Systems, Inc. "The Trenton facility is strategically located closer to our customers in the southern part of the country and has access to a local labor force capable of helping us meet growing demand while strengthening our market-leading position."
The expansion of the company's manufacturing and distribution capacity begins with the acquisition and upgrade of a 421,000-square-foot manufacturing, distribution and office facility located at 30 Industrial Park Boulevard in Trenton, conveniently located between Charleston, South Carolina; Columbia, South Carolina; Charlotte, North Carolina; and Atlanta. The facility is expected to be operational by the third quarter and has the capability to expand further when needed.
"We're proud to welcome Generac to the South Carolina business community and look forward to seeing all that we know they will achieve in Edgefield County," said South Carolina Gov. Henry McMaster. "With a workforce at its disposal that is second to none and one of the most competitive business environments in the world, we know that Generac will have the tools necessary for success."
With this increase in production and distribution capabilities, Generac is inviting individuals seeking career opportunities at the Trenton plant to learn more about Generac on its careers webpage.
MEDIA CONTACT: Dave Racine: david@punch-pr.com | 414-534-6948
About Generac
Generac Power Systems, Inc. (NYSE: GNRC) is a leading global energy solutions company, supplying backup power and prime power systems, engine-powered and battery-powered tools and equipment, and solar energy storage systems. In 1959 our founder designed and manufactured the first affordable backup generator. 62 years later, the same dedication to innovation, quality and performance has expanded the company's industry-leading product portfolio into homes and small businesses, job sites, and industrial and mobile applications across the globe. Generac offers battery storage systems for homes, energy management systems for businesses and utilities, backup and prime power systems up to 2 megawatts, and paralleled power solutions up to 100 megawatts.
About S.C. Department of Commerce
As South Carolina's leading economic development agency, the Department of Commerce works to recruit new businesses and help existing business grow. S.C. Commerce has recruited world-class companies to South Carolina such as BMW, Boeing, Continental, Giti Tire, LPL Financial Holdings, Mercedes-Benz Vans, Samsung, Toray and Volvo Cars and also supports startups, small and existing business, innovation, and rural development initiatives. S.C. Commerce partners with the S.C. Technical College System via readySC to support workforce training and recruiting, and with the S.C. Department of Employment and Workforce, which provides worker training and employment opportunities within the state. With a strong international footprint, the Palmetto State has consistently been among the top in the nation for attracting jobs through foreign direct investment on a per capita basis. Additionally, the state has won the Gold or Silver Shovel Award from Area Development magazine every year since 2011. For more information, visit www.SCcommerce.com.
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>>> The AZEK Company Inc. (AZEK) engages in designing, manufacturing, and selling building products for residential, commercial, and industrial markets in the United States. The operates in two segments, Residential and Commercial. Its products include trims, decks, porches, moldings, railings, pavers, and bathroom and locker systems, as well as extruded plastic sheet products and other non-fabricated products for special applications in industrial markets. The AZEK Company Inc. offers its products under the brand names of Celtec, Playboard, Seaboard, Flametec, Designboard, Cortec, Sanatec, Scranton Products, Aria Partitions, Eclipse Partitions, Hiny Hiders, Tufftec Lockers, and Duralife Lockers. The company was formerly known as CPG Newco LLC and changed its name to The AZEK Company Inc. in June 2020. The AZEK Company Inc. was founded in 2013 and is headquartered in Chicago, Illinois. <<<
Article -
https://investorshub.advfn.com/secure/post_new.aspx?board_id=38031
Generac - >>> Powering Up This Fund
https://investorshub.advfn.com/secure/post_new.aspx?board_id=38031
IBD: Generac soared in 2020. What's your thesis?
Grossman: They dominate the residential stationary backup power generation market with over a 75% share. But that standby backup power generation market is just 5% penetrated in the U.S., so there's a long runway for growth.
They're also viewed as a clean-energy source, since their generators are run by natural gas, often replacing diesel generators.
And several years ago they got into residential solar battery storage. They made acquisitions. Now they're one of the leading solar power management systems along with Tesla (TSLA). There's an even longer runway for growth on the solar home battery side. So we see 15% growth for them for some time.
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>>> Trex Company, Inc. (TREX) manufactures and distributes wood and plastic composite products, and related accessories for residential and commercial decking, and railing applications in the United States. It offers Trex Transcend, Trex Select, and Trex Enhance protective shells for protection against fading, staining, mold, and scratching; and Trex Hideaway, a hidden fastening system for grooved boards; and Trex DeckLighting, a LED dimmable deck lighting for use on posts, floors, and steps. The company also provides Trex Transcend Railing products used in Trex decking products and other decking materials; Trex Select Railing for simple clean finished look; Trex Enhance railing system; and Trex Signature aluminum railing for contemporary look. In addition, it offers Trex Seclusions fencing product, including structural posts, bottom and top rails, pickets, and decorative post caps; and Trex Elevations, a steel deck framing system. Further, the company acts as a licensor in various licensing agreements with third parties to manufacture and sell products under the Trex name, including Trex Outdoor Furniture; Trex RainEscape, an above joist deck drainage system; Trex CustomCurve that allows contractors to heat and bend Trex products; Trex Pergola, a cellular PVC product; Trex Latticeworks outdoor lattice boards; Trex Cornhole boards; Diablo Trex Blade, a saw blade for wood-plastic composite decking; Trex SpiralStairs and structural steel posts; Trex Outdoor Kitchens, Cabinetry, and Storage; and Trex Outdoor Fire & Water products. Additionally, it offers architectural and aluminum railing systems, and staging equipment and accessories. The company sells its products through wholesale distributors, retail lumber dealers, and Home Depot and Lowe's stores, as well as through its direct sales staff, independent sales representatives, and bidding on projects. The company was founded in 1996 and is headquartered in Winchester, Virginia.
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>>> Generac Announces New Business Organization, Executive Appointments
January 19, 2021
Yahoo Finance
New organization, C-level positions showcase Generac's commitment to energy technology industry
https://finance.yahoo.com/news/generac-announces-business-organization-executive-173000399.html
WAUKESHA, Wis., Jan. 19, 2021 /PRNewswire/ -- Generac Power Systems (NYSE: GNRC) has appointed three executives to new positions and has established a new business organization as part of its "Powering Our Future" strategy, the Company announced today.
The new organization, called Energy Technology (ET), will consist of all Generac businesses whose primary focus is on products or services related to storage and energy management products. This includes the Company's acquisitions of Pika Energy, Neurio Technologies and Enbala Power Networks as well as Generac's existing Connectivity business. Combining these teams into one operating group will help position the Company as an emerging leader in the energy storage and management industry, while internally aligning objectives and business priorities, and accelerating the Company's go-to-market efforts. Further, the ET organization will serve as the operating platform for future potential acquisitions in the energy technology space.
Russ Minick will lead the new ET organization, with the title of president, Energy Technology. Under his leadership, the ET team will collaborate with Generac's business groups to deliver a wide range of clean energy products and services to end-markets globally. Minick will also retain his duties as Chief Marketing Officer, leading the Company's corporate marketing strategy, as he has since 2016.
Patrick Forsythe has been appointed to the newly created position of Chief Technical Officer. In his new role, Forsythe will be responsible for the integration of new and transformative technologies into Generac's products and building a technical team to further support future technical product development needs. Forsythe has led Generac's global engineering team since rejoining the company in 2015. His extensive experience will be pivotal in creating market-defining technologies across the Generac portfolio of products.
Steve Goran has been appointed Chief Strategy Officer. This critical new position is tasked with quickly assessing new business opportunities and ventures, while simultaneously formulating long-term strategy, while also managing the year-round strategic planning and development efforts at the Company. Goran has more than 30 years of experience with Generac, having served in many roles within the organization.
"Creation of the Energy Technology organization and these three new roles signals our commitment to leading the energy management industry of the future," said Aaron Jagdfeld, Chairman and CEO of Generac. "Along with the board of directors, I congratulate Steve, Patrick, and Russ on their new leadership roles and look forward to the continued growth I know they will help us achieve."
MEDIA CONTACT: Ashley Kast: akast@punch-pr.com | 608-633-2404
About Generac
Generac Power Systems, Inc. (NYSE: GNRC) is a leading global supplier of backup power and prime power products, systems, engine-powered tools, and solar energy storage systems. In 1959, our founder was committed to designing, engineering and manufacturing the first affordable backup generator. More than 60 years later, that dedication to innovation, durability and excellence has resulted in the company's ability to expand its industry-leading product portfolio into homes and small businesses, on job sites, and in industrial and mobile applications across the globe. Generac offers single engine backup and prime power systems up to 2 MW and paralleled solutions up to 100 MW, and uses a variety of fuel sources to support power needs for our customers. Generac hosts Power Outage Central, the definitive source of U.S. power outage data, at Generac.com/poweroutagecentral. For more information about Generac and its products and services, visit Generac.com.
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Generac - >>> Here's Why I Think Generac Holdings (NYSE:GNRC) Might Deserve Your Attention Today
Simply Wall St
January 20, 2021
https://finance.yahoo.com/news/heres-why-think-generac-holdings-061926833.html
Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. And in their study titled Who Falls Prey to the Wolf of Wall Street?' Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Generac Holdings (NYSE:GNRC). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.
Generac Holdings's Earnings Per Share Are Growing.
As one of my mentors once told me, share price follows earnings per share (EPS). That makes EPS growth an attractive quality for any company. Impressively, Generac Holdings has grown EPS by 35% per year, compound, in the last three years. This has no doubt fueled the optimism that sees the stock trading on a high multiple of earnings.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While we note Generac Holdings's EBIT margins were flat over the last year, revenue grew by a solid 6.3% to US$2.3b. That's a real positive.
The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.
Are Generac Holdings Insiders Aligned With All Shareholders?
Since Generac Holdings has a market capitalization of US$17b, we wouldn't expect insiders to hold a large percentage of shares. But we do take comfort from the fact that they are investors in the company. Indeed, they have a glittering mountain of wealth invested in it, currently valued at US$276m. This suggests to me that leadership will be very mindful of shareholders' interests when making decisions!
It's good to see that insiders are invested in the company, but are remuneration levels reasonable? A brief analysis of the CEO compensation suggests they are. I discovered that the median total compensation for the CEOs of companies like Generac Holdings, with market caps over US$8.0b, is about US$11m.
Generac Holdings offered total compensation worth US$6.1m to its CEO in the year to . That comes in below the average for similar sized companies, and seems pretty reasonable to me. CEO compensation is hardly the most important aspect of a company to consider, but when its reasonable that does give me a little more confidence that leadership are looking out for shareholder interests. I'd also argue reasonable pay levels attest to good decision making more generally.
Should You Add Generac Holdings To Your Watchlist?
For growth investors like me, Generac Holdings's raw rate of earnings growth is a beacon in the night. If you need more convincing beyond that EPS growth rate, don't forget about the reasonable remuneration and the high insider ownership. Each to their own, but I think all this makes Generac Holdings look rather interesting indeed. You should always think about risks though. Case in point, we've spotted 2 warning signs for Generac Holdings you should be aware of.
You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with insider buying in the last three months.
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>>> Hubbell Incorporated (HUBB), together with its subsidiaries, designs, manufactures, and sells electrical and electronic products in the United States and internationally. The company operates through two segments, Electrical and Power. The Electrical segment offers standard and special application wiring device products, rough-in electrical products, connector and grounding products, lighting fixtures and controls, and other electrical equipment for use in industrial, commercial, and institutional facilities by electrical contractors, maintenance personnel, electricians, utilities, and telecommunications companies, as well as components and assemblies for the natural gas distribution market. It also designs and manufactures various high voltage test, industrial controls, and communication systems for use in the non-residential and industrial markets, as well as in the oil and gas, and mining industries. This segment sells its products through electrical and industrial distributors, home centers, retail and hardware outlets, lighting showrooms, and residential product oriented Internet sites; special application products primarily through wholesale distributors to contractors, industrial customers, and original equipment manufacturers; and high voltage products directly to its customers through sales engineers. The Power segment designs, manufactures, and sells distribution, transmission, substation, and telecommunications products. This segment sells its products to distributors, as well as directly to users, such as utilities, telecommunication companies, pipeline and mining operations, industrial firms, construction and engineering firms, and civil construction, water utility, transportation industries. Hubbell Incorporated was founded in 1888 and is headquartered in Shelton, Connecticut.
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>>> Regal Beloit Corporation (RBC), together with its subsidiaries, designs, manufactures, and sells electric motors, electrical motion controls, and power generation and transmission products worldwide. It operates through four segments: Commercial Systems, Industrial Systems, Climate Solutions, and Power Transmission Solutions. The Commercial Systems segment provides AC and DC motors, electronic variable speed controls, fans, blowers, and precision stator and rotor kits. The Industrial Systems segment offers AC motors for industrial applications; electric alternators for prime and standby power applications to data centers, marine, agriculture, healthcare, mobile, and defense markets; and power generation switchgear for prime and standby power, distributed generation, and cogeneration applications, as well as residential, automatic, and bypass isolation transfer switches. The Climate Solutions segment provides fractional motors, electronic variable speed controls, and blowers, as well as fractional horsepower motors for residential and light commercial HVAC, water heater, and commercial refrigeration markets. The Power Transmission Solutions segment offers mounted and unmounted bearings; conveyor products; disc, diaphragms, gear and flexible couplings, transmission elements, gears, grids, jaws, elastomers, and joints; mechanical power transmission drives, and components; and worm gearing, shaft configuration, helical offset, concentric and right angle, bevel and miter gearing, center pivot gearing, and open gearing products, as well as modular plastic belts, conveying chains, and hydraulic pump drives. It serves beverage, bulk handling, metal, special machinery, energy, and aerospace and general industrial markets. The company sells its products directly to original equipment manufacturers and end-users through a network of direct and independent sales representatives, and distributors. Regal Beloit Corporation was founded in 1955 and is based in Beloit, Wisconsin.
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>>> GE's shares soar as earnings recover from pandemic lows
Reuters
by Rajesh Kumar Singh and Rachit Vats
October 28, 2020
https://finance.yahoo.com/news/ge-reports-smaller-loss-business-104632343.html
GE's shares soar as earnings recover from pandemic lows
(Reuters) - General Electric Co on Wednesday unexpectedly reported a quarterly profit and a positive cash flow on the back of cost cuts and improvements in its power and renewable energy businesses, sending its shares 10% higher.
The Boston-based industrial conglomerate reported a free cash flow of $514 million from industrial operations in the third quarter, compared with an outflow of $2.1 billion in the previous quarter and Refinitiv's average analyst estimate of an outflow of $876 million.
GE said it expects industrial free cash flow to be at least $2.5 billion in the fourth quarter and positive in 2021.
Adjusted profit for the quarter came in at 6 cents per share compared with Refinitiv's average analyst estimate of a loss of 4 cents per share.
The company's shares, which have fallen about 40% since the beginning of 2020, were up about 10% at $7.81 in morning trade.
"We are managing through a still-difficult environment with better operational execution across our businesses," said Chief Executive Lawrence Culp.
Culp is trying to turn around the company by improving free cash flow and cutting debt. However, the coronavirus pandemic has hit those efforts by hammering GE's aviation unit, usually the company's most profitable and most cash-generative segment.
In response to the pandemic-induced turmoil, GE is cutting $2 billion in costs and aiming to generate $3 billion in cash savings. The company said it has, thus far, realized 75% of its target.
Revenue at both power and renewable energy businesses recovered from the last quarter even as orders saw a double-digit dip. Revenue at GE's aviation unit fell an annual 39% in the latest quarter.
Analysts at Gordon Haskett Research Advisors said the earnings report would "reinforce the messaging that GE has fundamentally bottomed."
GE said an annual test of reserves in its legacy insurance business resulted in a "small positive margin" with no impact to earnings.
Mounting losses related to the company's run-off insurance operations - a portfolio of about 300,000 long-term care insurance policies it holds in its GE Capital unit - forced the company to take a $6.2 billion charge in 2018 and put aside $15 billion in reserves to shore it up.
The insurance charge also brought scrutiny from securities regulators. Earlier this month, GE warned that it could face a civil action for possible violations of securities laws over its accounting for the insurance business.
GE said it has reserved $100 million to cover potential penalties for all the accounting investigations.
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Dover Corp - >>> The 3 Greatest Stocks You've Never Heard Of
One company has returned almost 29,000% since 1975, while the other two have quintupled the S&P 500's gains over the past 20 years.
Motley Fool
Sean Williams
Jul 7, 2020
https://www.fool.com/investing/2020/07/07/the-3-greatest-stocks-youve-never-heard-of.aspx
This has been a year that no one will soon forget -- especially Wall Street.
In a four-month span, the stock market experienced about a decade's worth of volatility. Panic surrounding the coronavirus disease 2019 (COVID-19) pandemic slashed 34% off of the value of the widely followed S&P 500 in less than five weeks. Then, in the 11 weeks that followed, the benchmark index gained most of what it lost back, while the technology-focused Nasdaq Composite has pushed to one new all-time high after another.
In many respects, the usual suspects are responsible for this rebound -- the FAANG stocks, cloud-computing companies, artificial intelligence stocks, cutting-edge biotech companies, and really anything having to do with leading-edge or asset-light innovation. But what you might not realize is that some of the market's greatest stocks are company's you've never heard of before.
Here are three such names.
White Mountains Insurance Group (WTM)
Most investors are familiar with investing great Warren Buffett and have likely heard of his company, Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B). They may even be familiar with Markel, which is often described as a "mini-Berkshire." But there's a very good chance you've never heard about White Mountains Insurance Group (NYSE:WTM), which really is a bit of an under-the-radar mini-Berkshire Hathaway.
Following the sale of OneBeacon in 2017, White Mountains Insurance has focused its attention on its big five investments. These include HG Global and BAM, which provide municipal bond insurance and reinsurance, Kudu, which offers advisory services and capital solutions to asset management and wealth management companies, and MediaAlpha, a marketing technology company, to name three of the five. Like Buffett, White Mountains is generally focused on low-risk, fee-based businesses that provide predictable cash flow and are often tied to the health of the U.S. economy (which spends far more time expanding than contracting).
Beyond just acquiring controlling or significant stakes in five diverse businesses, White Mountains also invests in fixed-income assets and equities (typically passive exchange-traded funds). Though it doesn't have the $210 billion-plus investment portfolio that Warren Buffett's Berkshire Hathaway sports, White Mountains did have almost $1.2 billion in fixed-income assets at the end of March, including $486 million in corporate bonds, and another $1.15 billion in equities and other long-term investments. Considering that the stock market is known to return 7% over the long-run, inclusive of dividend reinvestment, White Mountains' investment strategy should yield mid-single-digit portfolio growth.
Also, like Berkshire Hathaway, White Mountains Insurance Group regularly repurchases its own common stock. Over the past five years, White Mountains' share count has nearly been halved from approximately 6 million shares outstanding to just 3.11 million. Buybacks tend to have a positive impact on book value and earnings per share, which has likely played a big role in the company's 11-year winning streak (based on total return, including dividends) and 645% return since the century began.
York Water (YORW)
When I say "water utility," your initial reaction might be to yawn loudly, or perhaps even scroll to the next great unheard of stock. But pass up Pennsylvania-focused York Water (NASDAQ:YORW) at your own risk, as it's delivered a 667% return since the beginning of 2000, which has more than quintupled the return of the benchmark S&P 500 over the same time frame.
If you want a true "wow" statistic, how about this: No publicly traded company has been paying a longer consecutive dividend than York Water. York began paying a regular dividend to its shareholders back when James Madison was president of the United States. No joke -- York has paid dividends for 204 consecutive years. The next-closest company is Stanley Black & Decker which has been paying a dividend for 143 straight years. That's a better than six-decade gap between York Water and the No. 2 consecutive dividend-paying company.
Admittedly, providing water and wastewater services isn't exactly an exciting business. However, it provides plenty of predictable demand and cash flow, which has allowed York to continue paying a dividend for more than two centuries, as well as plot out acquisitions with excellent visibility. It also doesn't hurt that most utility stocks operate as monopolies or oligopolies in the municipalities they service.
Furthermore, the company's water and wastewater services are regulated operations. Though this means York Water isn't able to pass along price hikes at its choosing, it also means that it's not exposed to any wholesale pricing, which can be potentially volatile. When it comes to cash flow predictability, it's really hard to beat York Water.
Dover
Other than being a state capital, Dover (NYSE:DOV) is highly unlikely to ring a bell with most investors. However, since the beginning 1975, Dover' stock has returned a whopping 28,800% to its shareholders, and the company is riding the second-longest dividend increase streak among all Dividend Aristocrats at 64 years. For those of you keeping score at home, Dover's annualized rate of return is close to 13.3% over the past 45 years, which is almost double that of the historic return of the stock market.
What makes Dover such a great company is that it seemingly has its hands in everything. It generates revenue from fueling solutions, refrigeration and food equipment, imaging and digital printing, engineered component and software solutions, and so much more. There are a bevy of brands that Dover's products are sold under, and there's a pretty good chance you're seeing or interacting with these products on a regular basis. This product diversity helps to tie Dover's financial success to that of the U.S. and global economy. While that does mean it's not been impervious to COVID-19, it also suggests that Dover can take advantage of long periods of economic expansion.
Another big part of the Dover growth strategy is acquisitions. The danger of bringing in too many moving parts is that they can fail to mesh. This hasn't been a problem for Dover, which has dozens of independently operating companies under its umbrella. Dover has a history of buying up businesses that are top-performers in their specific industries, and then sitting back and allowing that same success to continue under the Dover umbrella. You could say that Dover is also somewhat Berkshire Hathaway-like in this respect, having completed 44 acquisitions just since 2010.
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Honeywell - >>> The 3 Safest Industrial Dividend Stocks Right Now
These solid dividend-growth stocks are also among the most reliable during tough times.
Motley Fool
Neha Chamaria
Oct 17, 2020
https://www.fool.com/investing/2020/10/17/the-3-safest-industrial-dividends-right-now/
Plenty of industrial companies pay a dividend, but not all dividends are safe. Think about it: As an income investor, would you rather own a stock that pays erratic dividends or has a dangerously high payout, or a stock that has consistently paid, even increased, dividends and can generate enough cash flows to cover its payout? The choice is obvious, and you'd be astounded to find how safe and reliable some top-notch industrial dividend stocks are.
A solid bet on automation
Honeywell (NYSE:HON) recently landed a spot in the Dow Jones Industrial Average (DJINDICES:^DJI) when the index reshuffled to accommodate businesses that "better reflect the American economy." Honeywell's a great fit, with its products, software, and solutions serving diverse industries and sectors, including aerospace, chemicals, healthcare, manufacturing, and retail, to name a few.
Now you might think: "Many industrial companies are as diversified, so what's so special about Honeywell?" In one word, it's technology. How many industrial companies have built a quantum computer, solutions for smart buildings, radar systems for drones, and cybersecurity software while manufacturing everyday products like home heating and security systems and electronics? Blockchain, Internet of Things (IoT), artificial intelligence (AI) -- these are just some of the emerging technologies Honeywell uses to build solutions.
This industry-technology hybrid makes Honeywell an alluring stock, more so when you consider the dividend. In 2019, Honeywell increased its dividend by double digits for the 10th consecutive year. 2020 being a relatively challenging year, Honeywell's latest dividend increase was a modest 3%, but it was also its 11th consecutive annual hike. That dividend growth has contributed a significant portion to shareholder returns in recent years. The stock currently yields 2%.
Honeywell's focus on automation could be a game changer. A marker research report from Fortune Business Insights predicts the global automation market will hit $326.14 billion by 2027, growing at a compound annual rate of 8.9% between 2019 and 2027. Honeywell has the financial clout and expertise to make the most of the opportunity.
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>>> Vertiv Is Teaming Up With Honeywell on Data Centers. Its Stock Looks Promising.
Barron's
By Al Root
Oct. 16, 2020
https://www.barrons.com/articles/vertiv-is-parterning-with-honeywell-on-data-centers-its-stock-looks-promising-51602898166?siteid=yhoof2&yptr=yahoo
Honeywell and Vertiv announced a joint effort on Thursday to help data centers reduce energy consumption.
Honeywell International is acting more like a software company than an industrial conglomerate. The company announced a techlike collaboration this past week with another firm that should enhance both partners’ long-term outlooks.
That’s a small bit of good news for Honeywell (HON) investors. But it could be a very big bit of good news for the company Honeywell joined with: Vertiv Holdings (VRT).
Honeywell and Vertiv announced a joint effort on Thursday to help data centers reduce energy consumption. Honeywell’s Building Technologies division provides management systems for data centers that run things such as air conditioning and sprinklers. Vertiv makes power-management systems for data centers.
Power is a big deal for data centers, which consume 1% of the world’s total energy output. Reduced consumption can save big dollars. “Our offerings complement each other to provide greater value to data center operators,” said Vertiv CEO Rob Johnson in the company’s news release.
Data centers were booming even before Covid-19 made the term “work from home” ubiquitous and increased the need for businesses to house and host key processes in the cloud.
The power-management products Vertiv provides are a critical component of a data center. “You can’t just plug a server into the wall,” Vimal Kapur, the CEO of Honeywell Building Technologies, or HBT, tells Barron’s. Data centers require uninterruptible power and sophisticated systems to manage voltage and current. After the servers, power-management systems are a data center’s second biggest expense.
Kapur’s unit, which includes data centers, accounted for about 16% of Honeywell’s total sales in the second quarter of 2020. Data-center products account for a majority of Vertiv’s sales.
Industry analysts, even before Covid, expected data centers to handle about 175 zettabytes of data by 2025, up from about 21 zettabytes by the end of 2021. (Zetta is one with 21 zeros behind it. It’s a big number.)
That’s about 70% average annual growth, yet Vertiv, a key supplier to the industry, trades for only about 16 times estimated 2021 earnings of $1.15 a share, a discount to the roughly 21 price/earnings ratio of the S&P 500 index. Stock in data-center operator Switch (SWCH) trades for about 65 times estimated 2021 earrings.
We aren’t suggesting Vertiv should trade for 65 times earnings. It’s largely an industrial hardware business, which goes through cycles related to IT spending and the health of the overall economy.
Still, the outlook for the company looks bright. And the Honeywell partnership offers another way for Vertiv investors to win: by being bought.
“We see this relationship as…[a] natural extension for HBT into a large and growing addressable market,” wrote Baird analyst Peter Armnet in a Thursday research report. “Longer-term, if the partnership shows success, [Vertiv] could become an attractive fit inside HBT as an acquisition candidate given its growth opportunity, share gain, and margin expansion likelihood as SaaS [software-as-a-service] offerings grow.”
Honeywell has its own software aspirations. It generates roughly 14% of total sales from software solutions. And Vertiv isn’t all about hardware. Its Services unit, which include software products, account for about 30% of sales.
Acquisition timing—and pricing—is hard to predict. Fortunately, Vertiv has another thing going for it. It’s perfect on Wall Street. Eight out of eight analysts covering the company rate shares Buy. The average Buy-rating ratio for stocks in the Dow Jones Industrial Average is about 58%. The average analyst price target for Vertiv stock is about $21 a share, up about 15% from a recent level of $18.34.
Wolfe analyst Nigel Coe calls Vertiv a growth and value story. He sees sales and earnings growing an average 7% and 20% a year, respectively, between 2020 and 2023, driven, in part, by the secular tailwinds in the data-center space. But with a below-average P/E multiple and an opportunity to improve profit margins, he believes value investors should look at Vertiv as well. Coe’s price target is $23, 25% higher than recent levels.
Vertiv reports earnings on Nov 4. Honeywell will report on Oct. 30. Investors can expect to hear more about potential benefits for joint product offerings then. Goldman Sachs analyst Mark Delaney expects Vertiv’s sales growth to be solid but adds “investors should be mindful of historical digestion periods in this end market.” Still, he rates the shares Buy. His price target is $19 a share.
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>>> Otis Worldwide Corporation (OTIS) manufactures, installs, and services elevators and escalators worldwide. The company operates through two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. The company was founded in 1853 and is headquartered in Farmington, Connecticut.
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>>> Carrier Global Corporation (CARR) provides heating, ventilating, and air conditioning (HVAC), refrigeration, fire, security, and building automation technologies worldwide. It operates through three segments: HVAC, Refrigeration, and Fire & Security. The HVAC segment provides products, controls, services, and solutions to meet the heating and cooling needs of residential and commercial customers. Its products include air conditioners, heating systems, controls, and aftermarket components, as well as aftermarket repair and maintenance services and building automation solutions. The Refrigeration segment offers transport refrigeration products and services, including refrigeration and monitoring systems for trucks, trailers, shipping containers, intermodal, and rail; and commercial refrigeration solutions, such as refrigerated cabinets, freezers, systems, and controls. The Fire & Security segment provides various residential and building systems, including fire, flame, gas, smoke, and carbon monoxide detection; portable fire extinguishers; fire suppression systems; intruder alarms; access control systems; and video management systems. Its other fire and security service offerings comprise audit, design, installation, and system integration, as well as aftermarket maintenance and repair and monitoring services. The company offers its products under the Autronica, Chubb, Det-Tronics, Edwards, Fireye, GST, Interlogix, Kidde, LenelS2, Marioff, Onity, and Supra; and Carrier, Automated Logic, Bryant, CIAT, Day & Night, Heil, NORESCO, and Riello brands. It sells its products directly to building contractors and owners, transportation companies and retail stores, and end customers, as well as indirectly through equity method investees, independent sales representatives, distributors, wholesalers, dealers, retail outlets, manufacturers' representatives, and value-added resellers. Carrier Global Corporation is headquartered in Palm Beach Gardens, Florida.
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>>> Generac Accelerates Its Energy Technology Capabilities With Acquisition of Enbala Power Networks
Yahoo Finance
October 5, 2020
https://finance.yahoo.com/news/generac-accelerates-energy-technology-capabilities-200500558.html
Acquisition advances Generac into the rapidly growing virtual power plant and smart grid services markets
WAUKESHA, Wis., Oct. 05, 2020 (GLOBE NEWSWIRE) -- Generac Holdings Inc. (“Generac” or the “Company”) (NYSE: GNRC) today announced the signing of an agreement to acquire Enbala Power Networks Inc. (“Enbala”), a leading distributed energy resources technology company. The deal solidifies Generac’s position as a market leader in Smart Grid 2.0 technologies and opens opportunities for the Company as a grid services provider.
Denver-based Enbala is one of the leading providers of distributed energy optimization and control software needed to ensure the operational stability of the world’s power grids. Its Enbala Concerto™ platform is being used by utilities and energy retailers around the world to leverage the power of distributed energy resources (DERs) to respond to the real-time energy balancing needs of power systems and energy markets.
“We’re on the leading edge of a remarkable transformation of the electrical grid, moving from a dated and centralized power distribution model to one that will be digitized, decentralized and more resilient,” said Aaron Jagdfeld, Chief Executive Officer of Generac. “Enbala is a proven virtual power plant and distributed energy resource management platform, and we believe their business model can be incredibly synergistic with our business. We’re proud to be at the forefront of the Smart Grid 2.0 with these new capabilities.”
With thousands of megawatts of residential and industrial standby power generation installed in the United States, Generac’s products can be leveraged in virtual power plant (VPP) and distributed energy resource management system (DERMS) markets. The Enbala Concerto™ software platform enables the connection of DERs to register and participate in distributed energy aggregation and control programs. This means otherwise dormant back up power generation assets can come online as part of a distributed energy solution and generate revenue for the asset owner.
As utility companies adopt cleaner forms of energy while simultaneously dealing with power disruptions, the opportunities to optimize the grid with DERs are becoming more creative. Residential and C&I rooftop solar, behind-the-meter battery storage systems, electric vehicles and flexible electricity load management are key asset components of a healthy future for Generac and distributed energy resources management.
“Distributed generation is a critical next step for utility companies faced with meeting peak demand while also dealing with capacity constraints and regulatory restrictions,” said Jagdfeld. “Enbala and Generac will be able to harness the power of everything from solar-plus-storage systems to our own generators to help limit the need for new power plants and maintain the convenience and flexibility of diversified power production.”
“Together with Generac, we have an unprecedented opportunity to make our energy grids more efficient, resilient and economical,” said Bud Vos, President and CEO of Enbala. “As part of the Generac team, we can now accelerate our vision for a cleaner grid, leveraging our technology and capabilities that help continuously balance supply and demand while enabling rapid and profoundly beneficial changes in our energy markets.”
The transaction is expected to close within thirty days. Terms of the deal were not disclosed.
INVESTOR RELATIONS CONTACT: Michael Harris Investor.Relations@generac.com | 262-506-6064
MEDIA CONTACT: David Racine david@punch-pr.com | 414-534-6948
About Generac
Founded in 1959, Generac is a leading global designer and manufacturer of a wide range of energy technology solutions and other power products. As an industry leader serving residential, light commercial, and industrial markets, Generac's products and solutions are available globally through a broad network of independent dealers, distributors, retailers, e-commerce partners, wholesalers and equipment rental companies, as well as sold direct to certain end user customers.
About Enbala
Enbala provides the advanced technology needed to ensure the operational stability of the world’s power grids by harnessing the power of distributed energy. Concerto, Enbala’s real-time energy-balancing platform, provides a highly flexible approach for creating controllable and dispatchable energy resources from flexible loads, energy storage and renewable energy sources. The platform underpins Enbala’s award-winning and industry-leading DERMS and VPP technology and dynamically optimizes and dispatches distributed energy resources to respond to the real-time needs of the power system. The platform gives energy retailers and utilities the flexibility to operate in real-time and to better manage the escalating complexities of increasingly variable energy assets and evolving market opportunities.
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>>> Emerson Electric (EMR) to Acquire Open Systems for $1.6B
Zacks
August 28, 2020
https://finance.yahoo.com/news/emerson-electric-emr-acquire-open-155403673.html
Emerson Electric Co. EMR announced yesterday that it will acquire Minneapolis, MN-based Open Systems International, Inc. The transaction has been valued at $1.6 billion in cash.
Subject to the satisfaction of closing conditions and the receipt of regulatory approvals, the acquisition is anticipated to consummate in fiscal 2021 (ending September 2021).
It is worth noting here that Emerson Electric’s share price decreased 1% yesterday, closing the trading session at $69.59.
Inside the Headlines
Open Systems is well-recognized for its enterprise automation solutions globally. Its main customer base is in the utilities sector. The high-performance, open and state-of-the-art solutions include Substation Automation Systems, Distribution Management Systems, Energy Management Systems and others. As many as 1,000 people are working globally for Open Systems.
The solutions provided by Open Systems as well as its expertise in transmission and distribution industries in the power sector add more value to Emerson Electric’s software offerings in the power generation industry. In all, the buyout will assist Emerson Electric’s customers (in the utilities and other industries) to digitize operations and thus help in the use of renewable energy sources and enhancing energy efficiency.
It is worth noting here that Open Systems will be integrated with Emerson Electric’s Automation Solutions segment. The division engages in providing valves, measurement and analytical instrumentation, actuators and regulators, process control systems and solutions, and industrial solutions. The segment’s revenues in third-quarter fiscal 2020 (ended Jun 30, 2020) were $2,589 million, representing 66.1% of total revenues generated by Emerson.
Emerson Electric’s Buyout Activities
The company believes in acquiring businesses to improve its product lines and market exposure. In the first nine months of fiscal 2020 (ended June 2020), it used $114 million for making acquisitions.
In February 2019, Emerson Electric acquired the Intelligent Platforms business of General Electric Company GE. The acquired business was integrated with the Automation Solutions segment. Also, in March 2020, Emerson Electric added Verdant top its portfolio, while American Governor Company was acquired in April 2020
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>>> Generac Power Systems, Inc. -- Moody's announces completion of a periodic review of ratings of Generac Power Systems, Inc.
Moody's
August 25, 2020
https://finance.yahoo.com/news/generac-power-systems-inc-moodys-140012285.html
Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Generac Power Systems, Inc.
Global Credit Research - 25 Aug 2020
New York, August 25, 2020 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Generac Power Systems, Inc. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Key rating considerations are summarized below.
Generac Power Systems, Inc.'s Ba2 corporate family rating considers its strong position in the residential standby generator market, moderate financial leverage, solid margins, and strong free cash flow generation aided by low capital expenditure requirements. The rating also incorporates Moody's expectations for continued organic revenue growth driven by an aging US electrical grid and low US penetration rates of residential home standby generators. The company also has presence in the nascent but rapidly growing clean energy on-site power storage market, which will help diversify the company's product offerings, as well as very good liquidity. However, Generac has a very high product concentration in residential standby power generators, significant reliance on the North American market, and is experiencing weakness in the commercial and industrial segment from the pandemic. Moody's also expects the company to make future acquisitions and potentially become more shareholder friendly.
This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.
The principal methodology used for this review was Manufacturing Methodology published in March 2020. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
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>>> SiteOne Landscape Supply, Inc. (SITE) engages in the wholesale distribution of landscape supplies in the United States and Canada. The company provides a selection of approximately 120,000 stock keeping units, including irrigation supplies, which consists controllers, valves, sprinkler heads, and irrigation and drainage pipes; fertilizers, grass seed, and ice melt products; control products, which include herbicides, fungicides, rodenticides, and other pesticides; landscape accessories, which comprise mulches, soil amendments, tools, and sod; nursery goods, which consist of deciduous shrubs, evergreen shrubs and trees, ornamental trees, shade trees, both field grown and container-grown nursery stock, and plant species; and outdoor lighting products, which include accent lights, dark lights, path lights, up lights, down lights, wall lights, and pool and aquatic area lighting, as well as hardscapes, such as pavers, natural stones, blocks, and other durable materials. It also offers consultative services consisting of assistance with irrigation network design, commercial project planning, generation of sales leads, marketing services and product support, and a series of technical and business management seminars; and distributes branded products of third parties. As of December 29, 2019, the company had 550 branches in the 45 United States and six Canadian provinces. It offers its products under LESCO, SiteOne Green Tech, and Pro-Trade brand names. The company markets its products primarily to residential and commercial landscape professionals who specialize in the design, installation, and maintenance of lawns, gardens, golf courses, and other outdoor spaces through branch network and direct distribution. SiteOne Landscape Supply, Inc. is headquartered in Roswell, Georgia.
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>>> Rockwell Automation, Inc. (ROK) provides industrial automation and digital transformation solutions. It operates in two segments, Architecture & Software, and Control Products & Solutions. The Architecture & Software segment offers a portfolio of automation and information platforms, including hardware and software. Its products include programmable automation controllers; design, visualization, and simulation software; and human machine interface products, networking products, industrial computers, sensing devices, machine safety devices, motion control products, and independent cart technology products. This segment also offers manufacturing execution systems and analytics software to enhance operational productivity and meet regulatory requirements. The Control Products & Solutions segment offers low and medium voltage electro-mechanical and electronic motor starters, AC/DC variable frequency drives, motor control and circuit protection devices, operator and signaling devices, termination and protection devices, relays and timers, and electrical control accessories. This segment also provides pre-configured line and load power solutions, packaged drives, motor control centers, and intelligent packaged power and engineered to order automation equipment solutions; and professional lifecycle services, such as safety, security, and digital transformation consulting, as well as automation and information project delivery capabilities, plant network, cloud, cybersecurity, asset management and predictive analytics, and remote, on-site, and managed support services. It primarily serves a range of industries, which include the automotive, semiconductor, and warehousing and logistics; food and beverage, and life sciences; and oil and gas, metals, and chemicals through independent distributors and direct sales force worldwide. Rockwell Automation, Inc. was founded in 1903 and is headquartered in Milwaukee, Wisconsin.
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$NIO Ai Artificial Intelligence
$NIO Chinese electric cars prepare US blitz in 2020 GAC, Byton and NIO push ahead with launch plans, eager for new markets https://asia.nikkei.com/Spotlight/Electric-cars-in-China/Chinese-electric-cars-prepare-US-blitz-in-2020-despite-trade-war
Could Nio Inc. $NIO Electric Vehicles be better than Tesla Inc $TSLA ? https://articles2.marketrealist.com/2019/09/nio-better-buy-than-tesla/
>>> AMETEK, Inc. (AME) manufactures and sells electronic instruments and electromechanical devices worldwide. The company's Electronic Instruments segment offers advanced instruments for the process, aerospace, power, and industrial markets; process control instruments for the oil and gas, petrochemical, pharmaceutical, semiconductor, automation, and food and beverage industries; and instruments to the laboratory equipment, ultra-precision manufacturing, medical, and test and measurement markets. This segment also provides power quality monitoring and metering, uninterruptible power systems, programmable power equipment, electromagnetic compatibility test equipment, sensors for gas turbines, dashboard instruments for heavy trucks and other vehicles, and instrumentation and controls for the food and beverage industries; and aircraft and engine sensors, monitoring systems, power supplies, fuel and fluid measurement systems, and data acquisition units for the aerospace industry. Its Electromechanical Group segment offers engineered electrical connectors and electronics packaging used in aerospace and defense, medical, and industrial applications; advanced precision motion control products for use in a range of automation applications across the medical, semiconductor, aerospace, defense, and food and beverage industries; high-purity powdered metals, strip and foil, specialty clad metals, and metal matrix composites; blowers and heat exchangers for aerospace and defense industries; and motors for use in commercial appliances, fitness equipment, food and beverage machines, hydraulic pumps, and industrial blowers. This segment also operates a network of aviation maintenance, repair, and overhaul facilities. In addition, the company offers clinical and education communication solutions for hospitals, health systems, and educational facilities. AMETEK, Inc. was founded in 1930 and is headquartered in Berwyn, Pennsylvania.
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$UURAF | China Sends America Another Warning On Rare Earths -- Seriously! https://www.forbes.com/sites/panosmourdoukoutas/2019/07/18/china-sends-america-another-warning-on-rare-earths-seriously/#2a9aed98748c
$HUSA Top Institutional Holders
Holder Shares Date Reported % Out Value
Vanguard Group, Inc. (The) 146,837 Jun 29, 2019 0.23% 29,851
Geode Capital Management, LLC 135,281 Jun 29, 2019 0.22% 27,502
Susquehanna International Group, LLP 134,238 Jun 29, 2019 0.21% 27,290
UBS Group AG 94,000 Jun 29, 2019 0.15% 19,110
AdvisorNet Financial, Inc 81,048 Jun 29, 2019 0.13% 16,477
Northern Trust Corporation 50,856 Jun 29, 2019 0.08% 10,339
Logan Capital Management, Inc. 47,539 Jun 29, 2019 0.08% 9,664
Virtu Financial LLC 47,318 Jun 29, 2019 0.08% 9,619
Blackrock Inc. 26,235 Jun 29, 2019 0.04% 5,333
GM Advisory Group, Inc. 10,800 Jun 29, 2019 0.02% 2,195
Top Mutual Fund Holders
Holder Shares Date Reported % Out Value
Fidelity Extended Market Index Fund 96,963 Jun 29, 2019 0.15% 19,712
Vanguard Extended Market Index Fund 93,484 Mar 30, 2019 0.15% 20,472
Vanguard Total Stock Market Index Fund 38,447 Mar 30, 2019 0.06% 8,419
Fidelity Total Market Index Fund 26,759 Jun 29, 2019 0.04% 5,440
iShares Core S&P Total U.S. Stock Market ETF 26,279 Jul 30, 2019 0.04% 5,518
Fidelity Series Total Market Index Fund 9,726 Jun 29, 2019 0.02% 1,977
Vanguard Balanced Index Fund 7,900 Dec 30, 2018 0.01% 1,494
Vanguard Institutional Index-Inst Total Stock Market Ind 6,100 Mar 30, 2019 0.01% 1,335
USAA Mutual Fd Tr-Extended Market Index Fd 5,104 Mar 30, 2019 0.01% 1,117
>>> GE Climbs as Improved 2019 Forecast Buoys Culp’s Turnaround
By Rick Clough
July 31, 2019
https://www.bloomberg.com/news/articles/2019-07-31/ge-raises-outlook-amid-power-improvement-as-turnaround-advances?srnd=premium
CEO calls outlook ‘a sign of progress, a sign of stability’
CFO Miller to step down soon as company seeks a replacement
General Electric Co. gained after raising its outlook for the year as the long-suffering power division showed signs of improvement, boosting Chief Executive Officer Larry Culp’s efforts to rejuvenate the ailing manufacturer.
The industrial businesses will generate as much as $1 billion in cash this year, up from the previous range of no more than zero, GE said in a statement Wednesday as it reported second-quarter earnings. The company also boosted its 2019 forecast for adjusted profit by 5 cents a share. In a further break with the past, GE said Chief Financial Officer Jamie Miller will step down soon.
The brighter outlook “is a sign of progress, a sign of stability here, but you’re not going to hear us trying to extrapolate too much too soon,” Culp said in an interview. “To the extent that you saw a lot of negative surprises at the back half of last year and fewer this year, while it’s early and we’re far from perfect, I do think that is a sign.”
GE's has gained twice as much as other industrials this year
The results -- boosted by quarterly earnings above Wall Street’s expectations -- mark the second straight quarter of improved performance under Culp, who set a low bar for himself by slashing the dividend and warning of a weak outlook in power equipment after taking the reins in October. The new CEO has sought to stabilize cash flow and reduce debt to stem one of the worst slumps in the company’s 127-year history.
“Things are turning,” said Nicholas Heymann, an analyst with William Blair & Co. While GE still has more work to do, especially in nursing the power business back to health, the latest moves suggest Culp is “comfortable in his own skin right now. He knows the key levers to pull.”
The shares advanced 3.3% to $10.87 before regular trading in New York. GE climbed 45% this year through Tuesday, doubling the increase in an Standard & Poor’s index of industrial stocks. With this year’s gain, GE has recovered much of the decline during the early part of Culp’s tenure.
Beating Expectations
GE said Miller would “transition from her role.” The company has started a search for a new CFO and Miller will stay on for now to smooth the changeover.
Adjusted profit fell to 17 cents a share in the second quarter, topping the 12-cent average of analyst estimates compiled by Bloomberg. Free cash flow from the manufacturing units was minus $1 billion, at the high end of GE’s previous expectations.
The results failed to impress Steve Tusa, an analyst at JPMorgan Chase & Co. who earned a reputation for prescience in recent years after emerging as the biggest GE bear on Wall Street. He questioned whether GE’s performance merited the improved outlook for this year, and recommended selling the shares into any gains.
“The stock is up on the headlines, as it has been many times before, but, like in the past, the underlying core fundamentals are actually a bit worse,” he said in a note to clients.
737 Max
Cash flow, a closely watched metric that is considered an indicator of company performance and earnings potential, has been a central weakness during GE’s recent slump. The company had previously said it expected to run through as much as $2 billion this year before a rebound in 2020.
In the second quarter, sales rose 4.8% at GE Aviation while orders fell 10%. The division, a longtime bright spot that has run into hurdles recently, makes engines for Boeing Co.’s 737 Max and 777X, the debut of which is facing delays because of an engine problem.
Culp said GE faces a cash headwind of $400 million a quarter as long as the Max isn’t flying. The Boston-based company makes the engine for the plane -- which has been grounded after a pair of crashes killed 346 people -- through a joint venture with France’s Safran SA.
Revenue at GE Power, which has struggled through a downturn in the gas-turbine market, fell 25%. But the business showed signs of improvement, Culp said, and orders in the gas-power operation climbed 27%.
Adjusted profit this year will be 55 cents to 65 cents a share, up a nickel from the prior range, the company said.
The outlook adjustment was due in part to “improvements at power, lower restructuring and interest, higher earnings and better visibility at the half,” Culp said in the statement.
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One of the Growing market in Middle East Seemed to Sandblasating and Coating Industry. There are Some Huge Giants like TECHNOBLAST WORKSHOPS TOOLS EQUIPMENT TRADING L.L.C in UAE dealing with sandblasting, spray painting machines in UAE. They also deals with Abrasives, Air after cooler etc.
Eviation - >>> Electric Planes to Debut for Airline Serving Nantucket, Vineyard
Bloomberg
By Tara Patel
June 18, 2019
https://www.bloomberg.com/news/articles/2019-06-18/electric-plane-maker-eviation-clinches-first-customer-cape-air
Israeli venture-backed aircraft maker predicts supply crunch
‘We’re talking to everyone’ on future sales, Eviation CEO says
EVIATION AIRCRAFT (EVTNF)
Electric-plane company Eviation Aircraft Ltd., which just signed up its first customer, predicts that in a few years it may not be able to keep up with orders.
“We’ll have a supply issue, not a demand issue,” Chief Executive Officer Omer Bar-Yohay said in an interview at the Paris Air Show. The founder of the Israeli venture capital-backed developer said U.S. regional airline Cape Air has agreed to buy a “double-digit” number of planes. The carrier flies some 88 Cessna turbo-props on routes such as Boston to Martha’s Vineyard and New York to Nantucket.
Eviation was showcasing a prototype, transported in pieces to the biennial exhibition, and is “talking to everyone” about future sales, said Bar-Yohay. Prospective customers include major U.S. carriers like United Continental Holdings Inc. and JetBlue Airways Corp., which are interested in planes to feed hubs, he said.
Eviation’s plane, the Alice, is one of a host of electric models at the design stage, and its nine-passenger capacity and 650-mile range from a single charge could give it an edge in the commuter market, currently served by a variety of light aircraft. Interest in electric planes is growing as the aviation industry comes under criticism for increasing emissions of greenhouse gases.
Read: Stratospheric: What Happens to Airline Emissions Under Self-Rule
Eviation is planning a first flight later this year in the U.S., followed by the assembly of more planes in Arizona and Washington state and certification around 2021.
“We’re a bit ahead of the pack but I have no doubt others are coming,” Bar-Yohay said, adding that taking on a customer like Cape Air will also entail developing charging and maintenance infrastructure.
“The hurdles aren’t just about getting the plane out the door, but everything else that goes with them,” he said. “We need an environment to support the plane and trained engineers and mechanics.”
Aircraft Economics
Eviation contends its plane makes economic sense: Running costs for the Alice will be about $200 per flight hour versus $1,000 for a turboprop. The Alice will be slower than some conventional craft, with a cruising speed of 240 knots (276 miles per hour), half the pace of modern business jets but not far short of some turboprop models.
The company is targeting “middle mile” commutes like Paris to Toulouse, Oslo to Trondheim in Norway and San Jose to San Diego.
Read: Airbus May Make the Next Version of Top-Selling Jet a Hybrid
Based in Kadima, near Tel Aviv, Eviation was founded in 2015 by a team of aviation and technology specialists. It’s one of about 100 different electric-aircraft programs in development worldwide, up 30% since 2017, according to Roland Berger, a consulting firm.
Zunum Aero, backed by Boeing Co. and JetBlue, aims to bring a hybrid-electric commuter model to market by 2022, while MagniX Technologies Pty is developing a propulsion system for an all-electric plane with a similar date in mind. In September, it announced a successful ground test of a 350-horsepower motor attached to the nose section of a Cessna test rig.
Joby Aviation Inc. is aiming smaller, targeting the air-taxi market with a plane that would carry four passengers, travel 150 miles and fly at a few thousand feet. Unlike the Alice, it wouldn’t be pressurized. Uber Technologies Inc. has said it’s also working on a flying taxi as an extension of its ride-sharing product that would take off and land vertically and reach the market by 2023.
At the other end of the scale, Easyjet Plc has partnered with U.S.-based Wright Electric to develop a full-sized battery-powered airliner within a decade for flights of less than two hours, enough to link London with Paris or Amsterdam.
Siemens AG, Airbus SE and Rolls-Royce Holdings Plc are working on a hybrid-electric propulsion system, the E-Fan X, that would also power a relatively large aircraft. Roland Berger predicts that the first 50-seat hybrid airliner will enter fare-paying service by 2032.
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