Robert Dixon, a director at Generac Holdings (GNRC), recently added 2,000 shares. The buy increased his holdings by 13 percent, and came to a total cost of just over $194,000.
This marks the first insider buy at the company in the past two years. Otherwise, company insiders have been likely to sell shares. The company CEO in particular has been a seller of shares on a regular basis.
Overall, company insiders own 2.7 percent of shares.
The manufacturer of power generation equipment has lost nearly 75 percent of its value in the past year. That’s in spite of a 15 percent rise in revenue, although overall earnings are down 55 percent over the past year.
With a profit margin of 10 percent, and with a solid balance sheet, the company is likely to move past the current issues that have weighed on shares and trend higher in the months ahead.
Action to take: Shares have gone from 50 times earnings last year to under 14 times forward earnings in the past year. That’s creating a reasonable valuation for the company moving forward, particularly given the steady demand for backup power generation. Shares look attractive here, even though the stock doesn’t pay a dividend.
For traders, the June 2023 $120 calls, last going for about $8.60, look attractive for a potential rally in shares in the first half of next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.