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Generac Holdings Inc. Message Board

  • danhuck danhuck Nov 29, 2012 5:14 PM Flag

    So what's the problem here...?

    OK, I know some folks are all H&B (Hot & bothered) over the recent attempts by large investors to take money out. But REALLY, why do you blame them?

    You should be cheering the folks who "made a market" in this stock!

    Here's my take on this:

    1) The company makes a very good product(s) and has a dominant share. Growth through FEAR of another eminent electrical grid failure is near certain.

    2) Investors brought the company public in 2010 (or 2011).

    3) By some tax quirk, they had a substantial tax credit and borrowed the $$ to pay a whopping $6+/shr dividend to themselves in 2012. For those who didn't check why the P/E was so low, we'll...

    3) Now there's 26M in float, BUT 68M shares issued in 2010 (date not sure).

    4) So the sharks want to extract even more for putting more shares (of the 68M authorized) of this company in play. Can you blame them?

    Any time I find a CO. with such a dominant share of a GROWING market, I'M INTERESTED!

    So I bought 5k shares at $34, and when the stock got to $35, I bought the equivalent of 50 cheap (in my opinion) Feb $35 PUTS puts as a hedge, when then the stock went to $35 & change.

    So know I sit there fully hedged at little cost to me through the next earnings release.


    Sentiment: Hold

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