A.I.M. Value Line Stocks

[OldAIMGuy]

Another new stock added to VL's Portfolio III (3-5 year appreciation potential).

Generac Holdings is a Wisconsin based "alternative energy" company I've followed closely since 2014.

This week, we are buying
Generac Holdings, a Wisconsin-based manufacturer of residential and commercial
back-up power systems. The company has a strong balance sheet, a dominant
market position, and bright earnings prospects, as it has targeted a very promising
sector of the economy. Many countries around the world, including the United
States, have electric grids that need to be upgraded. Indeed, rising demand for
electricity has not been met by utilities building additional base load units. Due
mostly to ESG concerns, new capacity has generally been derived from wind and
solar power, which are both interruptible. Many homeowners and businesses have
witnessed how long and devastating some electric outages can be. With a second
independent power source, homes and commercial concerns can continue to
function. What’s more, both markets are barely penetrated. In addition to natural
disasters, many regions do not have an easy time meeting peak demand. Just
recently in Texas, usage was so high that the grid almost crashed. As it is still
spring, it raises concerns over what may happen during an extended heat wave.
In any case, priced at about $220 a share, Generac is trading at less than 20
times 2022’s estimated earnings. While this is higher than the current market P/E
ratio of 16.2, it is well below the stock’s P/E of nearly 45 when it peaked at $524 a
share late last year. - Value Line

GNRC is a long time favorite of mine and has done well with AIM, too.



While a bit out-of-date, this history of AIM's management of GNRC should tell us something about both the company and AIM's risk management.

Best wishes,
OAG Tom