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Generac (GNRC) and Badger Meter (BMI): Good Companies, Expensive Stocks

Alex Smith
·3 min read

Mairs and Power recently released its Q1 2020 Investor Letter, a copy of which you can download below. The Mairs and Power Growth Fund posted a return of -18.84% for the quarter, outperforming its benchmark, the S&P 500 Index which returned -19.60% in the same quarter. You should check out Mairs and Power's top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.

In the said letter, Mairs and Power spoke about Generac Holdings Inc. (NYSE:GNRC) and Badger Meter Inc (NYSE:BMI). Generac is a designer and manufacturer of a wide range of energy technology solutions. Badger Meter is a marketer and manufacturer of flow measurement and control products. Year-to-date, Generac Holdings Inc. (NYSE:GNRC) stock gained 17.3% and on May 28th it had a closing price of $117.99. Year-to-date, Badger Meter Inc (NYSE:BMI) stock lost 4.5% and on May 28th it had a closing price of $62.01. Here is what Mairs and Power said:

"Generac and Badger had both been strong contributors to the Fund’s portfolio over the long term, but their valuations had become too expensive to warrant their continued inclusion."

In Q4 2019, the number of bullish hedge fund positions on Generac Holdings Inc. (NYSE:GNRC) stock decreased by about 3% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with GNRC’s downside potential.

In Q4 2019, the number of bullish hedge fund positions on Badger Meter Inc (NYSE:BMI) stock increased by about 11% from the previous quarter (see the chart here).

Our calculations showed that Generac Holdings Inc. (NYSE:GNRC) and Badger Meter Inc (NYSE:BMI) aren't among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this analyst’s “corona catalyst plays“. We interview hedge fund managers and ask them about best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital's Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:

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