SID 0026 Generac - Part 1

Generac has seen its sales and earnings decline for over two years.  Four powerful storms swept across the U.S. in the 2011-2012 period, but ever since then electric power outages have been well below normal.  In Part 1 of our discussion of Generac, we'll cover what businesses this company runs, and what management's strategy is.   We will have to stop and resume the discussion in Part 2, but you will start to see how our granular approach of deconsolidating and estimating sales and earnings within the backwaters of Generac can yield insight into where this company has been, and how it has changed through this difficult period for standby generators and other related engine products.

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Stocks-in-Depth thoroughly examines the fundamentals of reasonably valued high-quality small and mid-cap growth companies. It is produced by GARP Research, a provider of equity research to institutions including many of the most well-known fund managers for over 20 years. GARP is known for its granular modelling of business lines and in-depth assessment of competition and served markets. Stocks-in-Depth searches for value and growth by researching stocks that may be out of favor, or where a major catalyst to earnings growth is hidden. Our financial models attempt to shed light on trends underneath opaque segment reporting. Stocks in Depth emphasizes balance sheet accounts and profitability margins to determine underlying return on capital, and maintains healthy skepticism regarding pro forma adjustments and undue reliance upon unconventional measures such as EBITDA. We emphasize field visits with managements, industry conferences, non-public competitors and ancillary fields to detect industry dynamics. In our search for the best companies and investment opportunities, we often challenge the consensus view. StocksinDepth forecasts over the long-term, typically over about a three year horizon, and review track records going back for years.