Shares of the generators manufacturer has been trading inside the rising wedge since August 2012.
The company shows strong fundamentals. In fact, risen sales are expected for the current fiscal year as well as lower debts level. Moreover, earnings are anticipated to surge to 186M for $2.8 per share from only 175M for $2.51 per share recorded on 2013. Furthermore, leverage reduction of almost 20% aim for a better outlook.
The technical chart reveals the ability of the stock to fluctuate within the rising wedge. Hence, if stock gains arise over the upper band (at USD 62.5) of this bearish pattern, then the bullish would be confirmed. If this threshold is broke, investors could expect a rise toward the higher levels near the USD 70 midterm resistance.
According to both technical and fundamental criteria, it seems to be a good time for long position taking if the USD 62.5 threshold is broke. The bullish trend should allow the security to reach the USD 70 resistance. A stop loss will be placed under the entry point at USD 59.1.
Generac Holdings, Inc. specializes in the design, manufacture and marketing of primary and backup power generation solutions for the residential, commercial and industrial sectors. The group's products include generators, energy storage devices, electricity control systems, electrical equipment, etc. Net sales break down by family of products as follows:
- equipment for the residential sector (63.8%): backup, portable and motorized generators powered by natural gas, propane or fuel, switches, etc.;
- equipment for the industrial and commercial sectors (27.6%): stationary, containerized, industrial and backup generators fueled by natural gas, propane, fuel, etc., advanced systems and energy control software platforms, switches, modular power systems, etc.;
- other (8.6%).
The United States account for 84.7% of net sales.