Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. Trade-Ideas LLC identified Generac Holdings ( GNRC) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Generac Holdings as such a stock due to the following factors:
- GNRC has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $32.2 million.
- GNRC has traded 519,775 shares today.
- GNRC traded in a range 241% of the normal price range with a price range of $2.70.
- GNRC traded below its daily resistance level (quality: 51 days, meaning that the stock is crossing a resistance level set by the last 51 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower. EXCLUSIVE OFFER: Get the inside scoop on opportunities in GNRC with the Ticky from Trade-Ideas. See the FREE profile for GNRC NOW at Trade-Ideas More details on GNRC: Generac Holdings Inc. 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 Canada, and Mexico. GNRC has a PE ratio of 24.8. Currently there are 3 analysts that rate Generac Holdings a buy, no analysts rate it a sell, and 5 rate it a hold. The average volume for Generac Holdings has been 733,100 shares per day over the past 30 days. Generac has a market cap of $3.8 billion and is part of the industrial goods sector and industrial industry. The stock has a beta of 0.64 and a short float of 7.5% with 5.19 days to cover. Shares are down 2.5% year-to-date as of the close of trading on Wednesday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates Generac Holdings as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, increase in net income, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 9.6%. Since the same quarter one year prior, revenues rose by 20.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 81.08% and other important driving factors, this stock has surged by 57.71% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GNRC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electrical Equipment industry. The net income increased by 84.4% when compared to the same quarter one year prior, rising from $25.54 million to $47.09 million.
- Net operating cash flow has increased to $80.90 million or 16.36% when compared to the same quarter last year. Despite an increase in cash flow, GENERAC HOLDINGS INC's average is still marginally south of the industry average growth rate of 19.36%.
- GENERAC HOLDINGS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENERAC HOLDINGS INC reported lower earnings of $1.36 versus $4.76 in the prior year. This year, the market expects an improvement in earnings ($4.10 versus $1.36).
- You can view the full Generac Holdings Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.