NEW YORK (TheStreet) -- Wall Street and virtually every street in the northeastern U.S. has shut down Monday and possibly for longer.
The question isn't whether Hurricane Sandy and the weather will create large-scale damage and outages, it's what will the aftermath look like and which industries will turn crisis into opportunity.
There are no sure answers, but many investors have been anticipating some corporate beneficiaries of all the impending havoc and massive emergencies. We don't have to stretch our imaginations too hard in order to come up with some reasonable conclusions.
Take Generac Holdings (GNRC), which designs, manufactures and markets a range of generators and other engine-powered products for the residential, light commercial, industrial, and construction markets in the United States and Canada. GNRC reports its quarterly earnings on Wednesday, Halloween, and if that isn't scary enough its stock has already soared 15% from its Oct. 10th low of $24.95. The company has been in business 53 years and when it comes to backup generators and the like it controls about 70% of the market. Below is a one-year chart of the stock price and the quarterly profit margin. Up to now GNRC has been in a real slump, and that's part of the reason the stock has been afforded only a trailing PE ratio of 5.64 and a forward PE ratio of around 11.76. GNRC data by YCharts
Although Generac has a trailing-12-month profit margin of over 33% combined with quarterly revenue growth (year-over-year) as of the end of the June 30 quarter of an impressive 48%, it has over $895 million in total debt and a paltry total cash as of June 30th of $10.31 million. So from my viewpoint GNRC has already benefited greatly from the "Frankenstorm" scary-scenario. Rational investors may be wise to see how things play out over the next several days, including the quarterly earnings report, before trying to chase this stock. Generac doesn't even pay a dividend!
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