Should You Invest in Generac Holdings (GNRC)?

Diamond Hill Capital, an investment management company, released its “Mid Cap Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the quarter the strategy outperformed the Russell Midcap Index. The strategy returned 9.74% (gross) and 9.55% net of fees vs 8.60% for the index. As the economy and profit growth remained strong, equity markets continued their upward trend in Q1. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.

Diamond Hill Capital Mid Cap Strategy highlighted stocks like Generac Holdings Inc. (NYSE:GNRC), in the first quarter 2024 investor letter. Generac Holdings Inc. (NYSE:GNRC) is a power generation equipment, energy storage systems, and other power product manufacturer and supplier. The one-month return of Generac Holdings Inc. (NYSE:GNRC) was 1.83%, and its shares gained 19.92% of their value over the last 52 weeks. On June 6, 2024, Generac Holdings Inc. (NYSE:GNRC) stock closed at $140.03 per share with a market capitalization of $8.488 billion.

Diamond Hill Capital Mid Cap Strategy stated the following regarding Generac Holdings Inc. (NYSE:GNRC) in its first quarter 2024 investor letter:

"Though valuations have increased, we continue identifying high-quality companies we believe the market is overlooking. We accordingly initiated four new positions in Q1: Generac Holdings Inc. (NYSE:GNRC), Diamondback Energy (FANG), Johnson Controls International and Humana. Generac Holdings is a leading energy technology solutions manufacturer with a dominant position in residential home standby power. With its strong position in home standby and diverse energy solutions offerings, Generac is well-positioned for growth moving forward as increasing electricity usage and electrical grid instability drive demand for its products. Shares have been pressured over the last couple years as the company has faced inventory-related headwinds and soft near-term demand — giving us an opportunity to initiate a position at what we believe is a compelling discount to intrinsic value."

A technician in protective gear repairing a huge generator at a power plant.

Generac Holdings Inc. (NYSE:GNRC) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held Generac Holdings Inc. (NYSE:GNRC) at the end of the first quarter which was 34 in the previous quarter. The first quarter revenue of Generac Holdings Inc. (NYSE:GNRC) was $889.27 million. While we acknowledge the potential of Generac Holdings Inc. (NYSE:GNRC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Polen U.S. Small Company Growth Strategy commented about Generac Holdings Inc. (NYSE:GNRC) in the previous quarter investor letter. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.