I wanted to get this out to all Silver members as well as Gold members that have not had a chance to catch up to the trading room posts yet today. BGG (Briggs & Stratton Corp) was posted earlier today as trade idea in the Dividend & Income Investing group within the Trading Room & has continued to steadily advance since then.
As a potential bottoming play, the stock may still have plenty of room to run although it is rapidly approaching the first resistance/target level, which would be a backfill of Friday’s large gap (added to the second, updated chart below with the first chart being the one posted earlier today in the trading room). In order to get this out there asap, I’m just going to paste my previous comments below & will follow up with any additional comments on BGG & GNRC (Generac Holdings Inc).
I took a starter position in my first of what will likely be several companies that make generators in response to this article that I read over the weekend regarding PG&E’s plans for pre-emptive blackouts after their part in the CA wifefires resulted in their bankruptcy restructuring.
They aren’t the on CA ultility planning to do so going forward & I can only imagine the demand for generators (to keep refridgerators & medical necessary devices running, at a minimum) will spike in the coming months. BGG (Briggs & Stratton) might even be added as an official Growth & Income Trade with a decent dividend yield of 4.11% plus nice potential for captial appreciation/potential bottoming play.
https://www.wsj.com/articles/pg-es-radical-plan-to-prevent-wildfires-shut-down-the-power-grid-11556337671 (article may require a subscription)
GNRC is another generator manufacturer that should benefit from the preemptive blackouts in CA although, from the names that I’ve found so far, BGG appears to have the most upside potential. Still have some more DD to do though & will pass along any others that look compelling.
I also took a starter in GNRC & I continue to research the other generator makers but it takes quite a bit of work. The reason is that many are not publicly traded companies & some that are, like Coleman (Powermate line of generators), Honda, Yamaha, etc.. you find yourself navigating a string of holding companies that lead up to one parent company that have so many other products that even a 10x increase in their generator sales won’t move the needle on the parent company’s stock.
BGG makes lawn mowers, go-cart engines & many other small engines although what I like about them (-besides- (edit) the fact the company is poorly managed), is that in addition to making their own generators, many other companies buy their engines to power the generators they sell under their own label. From what I’ve seen in the past, living in Hurricane Alley nearly my entire life, is that Generac seems to be the leading manufacturer of the higher-end whole-house generator while BGG makes a lot of the budget low-end, portable generators.
To add to those comments, PG&C is not the only California utility company that plans to initiate pre-emptive blackouts going forward. I would also suspect that going forward, we will see some type of subsidy/rebate program at the state and/or federal levels to help residents affected by these blackouts to help offset the cost of purchasing a generator, at least for those that qualify as ‘medically-necessary’. For example, FEMA provided a reimbursement of up to $500 towards the cost of a generator purchase after hurricane Irma hit South Floriday in 2017 for those that lost power and needed the generator to run a medically-necessary device such as a CPAP machine for sleep apnea (which has seen a tremendous rate of growth in recent years), without any income limit requirements.