David Hay — Portfolio Update: Double Follow-Up (GNRC & EQT)
Two follow-ups on existing Buy-list names, one that has worked and one that hasn't.
Generac (GNRC), the
Aug-28 POW! at $186.18, is ~+10% at ~$205 after an 8-K disclosing a
supply agreement with Amazon for up to $8B of backup generators for its data centers through 2033 ($2.4B in 2027–28 deliveries), with Amazon getting the right to buy up to
1.7M GNRC shares at $200.93 only as it places orders — "
That alignment is the moat." At
17.9× forward (~57% below the 2021 peak) and with consensus targets of $284–$295 "almost certainly stale," "
We are reiterating our GNRC BUY recommendation."
EQT has gone "all downhill" since the house endorsed it (~$50 vs lots at $64.96 and $57.00), but "we are sticking to our bullish guns": 12.4× P/E (~40% below the S&P) for the largest US gas producer, "
among the best AI plays" as ~50 GW of gas-fired plants are built and Japan funds ~18 GW of US gas generation, including a 9.2 GW plant in Portsmouth, Ohio, near EQT's footprint. "
We are rating EQT a Strong BUY." Full
Buys / Holds-Trims / Sells tables published.
One-line take: a hold-your-nerve issue: add to the winner on its dip pattern, and double down on the loser because the thesis has not changed. The GNRC half argues that the pick's thesis (data-center backup power, not hurricanes) has been "validated" by "a multi-year, SEC-filed commercial commitment" from Amazon. The structure is the point: Amazon's warrant-style right to buy stock at a fixed $200.93 vests only as it orders generators, part of it vested at signing, and so "Amazon now has a direct financial incentive to keep buying from Generac, not shop around." Supporting data: backlog $1.6B ($1.35B for 2027 delivery), ~$1B of orders in 90 days, two hyperscale agreements, large-megawatt capacity being tripled, FY data-center guidance $450M, and a Q2 EPS beat of 49%. Valuation is framed against 2021, when the market paid 42× forward and ~10× sales for "a cyclical demand story priced as a secular one." Today's 17.9× / 2.76× is on "structurally different" earnings. Technically, GNRC has made higher highs with a material pull-back after each one, and "these have been opportune times to build… a position." The next catalyst is Oct 27 Q3 earnings. The EQT half is deliberately short (it quotes Munger, Lynch and Todd Combs on simplicity): 12.4× forward P/E versus a P/S that has de-rated from ~6.5× to 3.28×, the largest US gas producer ("ahead of even Exxon and Chevron") with its own gathering and transmission network, US gas at ~$3/MMBtu against >$20 in Europe and Asia, ~50 GW of gas plants planned, and Japan's ~18 GW of committed US gas generation. The market's "apathy" will not "continue indefinitely." Tables: AZN joins the Buy list (the Sep-18 POW!); PBR moves from Buys to Holds/Trims (both lots H, highlighted, no text); QNST drops off Holds/Trims with no Sells entry; NHPEF SB→B and SLB H/T→H (both highlighted); PALL's first lot prints SB.
1. Stocks & names mentioned
| Ticker | Name | Research | View | What he said | At |
|---|
| GNRC | Generac Holdings | QT · SA · STK · FA | Positive | "We are reiterating our GNRC BUY recommendation." Bought Aug 28 at $186.18, now ~$205 (+~10.2%; table marks it $206.77, +11.06%). The trigger: last week's 8-K disclosing a long-term Amazon supply agreement for up to $8B of backup generators for its data centers globally through 2033, with $2.4B of initial deliveries in 2027–28 alone. Amazon receives the right to buy up to 1.7M GNRC shares at $200.93 "but only as it actually places orders," and part of that vested at signing: "not a letter of intent or a preferred vendor arrangement… That alignment is the moat." The business: data-center backlog $1.6B ($1.35B for 2027), ~$1B of orders in the 90 days to Jun 30, two multi-year hyperscale agreements, large-megawatt capacity being tripled (new Belvidere, IL plant), FY data-center guidance raised to $450M, and Q2 adj. EPS $2.91 vs $1.95 (+49%). Valuation: 17.9× forward P/E and 2.76× P/S, ~57% below the 2021 peak of 42× / ~10× sales, which was "a cyclical demand story priced as a secular one." Technicals: steady higher highs, each followed by a material pull-back; this one is "another rewarding chance to buy into the name, or add to it." Consensus $284–$295 (UBS $340, Jefferies $338) is "almost certainly stale." Next catalyst: Oct 27 Q3 earnings, "a powerful flywheel." | read ↗ |
| EQT | EQT Corporation | QT · SA · STK · FA | Positive | "We are rating EQT a Strong BUY." One of "our favorite Buy-list names despite (or, perhaps, because) its share price has gone south": marked $50.18 vs lots at $64.96 (−22.75%) and $57.00 (−11.96%). It broke out in 2024 and ran ~30%, "right up until around the time we gave it our seal of approval… Since then it's been… all downhill." "Call us obstinate… we are sticking to our bullish guns." Valuation: P/E 12.4, "about a 40% discount to the S&P. For a company with superior growth prospects, that strikes us as silly-cheap." The simple case: the largest US natural-gas producer ("ahead of even Exxon and Chevron"); US gas demand "roaring" from data centers and LNG exports; US gas "a fraction" of world prices (~$3/MMBtu vs >$20 in Asia and Europe); a "vast and extremely valuable" gathering and transmission network. "Among the best AI plays" for those averse to "lofty prices": ~50 GW of gas plants under construction or planned makes $3 gas "hard to believe." Catalyst: Japan's ~18 GW of committed US gas generation, including a 9.2 GW Portsmouth, Ohio project (the largest US gas plant ever), mostly "in, or close to, EQT's production and transmission footprint." The market's "apathy" won't "continue indefinitely." | read ↗ |
| AMZN | Amazon.com | QT · SA · STK · FA | Neutral | Referenced only — the counterparty in GNRC's up-to-$8B backup-generator supply agreement ("the largest e-commerce and cloud infrastructure company in the world"), holding the right to buy up to 1.7M GNRC shares at $200.93 as it places orders. Cited as the validation of the GNRC thesis. No view on Amazon shares. | read ↗ |
"View" is Haymaker's stance in this post. GNRC (Buy reiterated) and EQT (Strong Buy) are the two rated follow-ups; AMZN is rowed Neutral as GNRC's counterparty. Referenced only (not rowed): Exxon and Chevron (EQT is a larger US gas producer), the S&P 500 (the P/E comparison), analysts UBS / Jefferies / JPMorgan / Barclays (GNRC targets), Charlie Munger, Peter Lynch and Todd Combs (quoted on simplicity), Barron's (Sep 20 story on Japan's US gas-power investments), Japan's PM Sanae Takaichi, and Bloomberg (charts). The Buys / Holds-Trims / Sells tables are transcribed at the end of the article text. Changes vs Sep-14: AZN new on Buys (Sep-18 POW!); PBR moved Buys→Holds/Trims (H, highlighted; no commentary); QNST no longer printed (not on the Sells ledger); NHPEF SB→B and SLB H/T→H (highlighted); PALL's 2024 lot prints SB. Research: QT Qualtrim · SA Seeking Alpha · STK Stock Analysis.
2. Talking points
GNRC — the thesis gets an SEC-filed validation
- Bought Aug 28 at $186.18, now ~$205 (+~10.2%). Generac's 8-K disclosed "a long-term supply agreement with Amazon covering up to $8 billion in backup power generators for Amazon data centers globally, with $2.4 billion in initial deliveries expected in 2027 and 2028 alone."
- "The thesis that drove the original recommendation has now been validated by the largest e-commerce and cloud infrastructure company in the world."
GNRC — the scorecard since entry
- Q1 adj. EPS $1.80 vs $1.33 (+35%); Q2 $2.91 vs $1.95 (+49%) on revenue $1.17B (+11%). C&I $556M (+29%), residential $621M (−2%).
- Data-center backlog $1.6B ($1.35B for 2027), which "didn't even officially exist as a line item" when the house entered. ~$1B of orders in 90 days. FY data-center guidance $450M. Two multi-year hyperscale agreements. Large-megawatt capacity being tripled "because the contracted order book demands it."
- Consensus Moderate Buy (13 Buy / 5 Hold / 0 Sell); targets $284–$295; UBS $340, Jefferies $338, JPMorgan $261, Barclays $285 (Hold).
GNRC — why the Amazon deal's structure matters
- Amazon may buy up to 1.7M shares at $200.93, "but only as it actually places orders": the more generators it buys, the more shares it can acquire, up to $8B of cumulative purchases through 2033.
- Part vested immediately at signing, so this is "not a letter of intent or a preferred vendor arrangement with fine print." Amazon's stake "grows in direct proportion to the volume of business it sends Generac's way. That alignment is the moat."
GNRC — valuation: 2021 was the mistake, not today
- 17.9× forward P/E and 2.76× P/S, roughly in line with history outside the 2020–21 boom. In 2021 the market paid 42× and ~10× sales for "a cyclical demand story priced as a secular one."
- Today's multiple is "~57% below the 2021 peak, on a business whose commercial trajectory has improved significantly."
GNRC — technicals and the brass tacks
- A breakout last year that did not clear the longer-term range the house prefers, but "a steady series of higher highs," each followed by a material pull-back. "These have been opportune times to build, or build-up, a position… another rewarding chance to buy into the name, or add to it."
- Targets were set before the Amazon deal: "We'd expect upward revisions." The next catalyst is Oct 27 Q3 earnings (data-center orders, the $450M guide, color on the Amazon ramp). "We are reiterating our GNRC BUY recommendation."
EQT — simplicity, and admitting the chart
- Quotes Munger ("Take a simple idea and take it seriously"), Lynch ("The simpler it is, the better I like it") and Todd Combs ("no extra credit for degree of difficulty").
- EQT rose steadily and broke out in 2024 (+30%) "right up until around the time we gave it our seal of approval… Since then it's been… all downhill." "Call us obstinate… we are sticking to our bullish guns."
EQT — silly-cheap, and the four-line case
- P/E 12.4, "about a 40% discount to the S&P… silly-cheap" for superior growth (P/S down from ~6.5× in early 2025 to 3.28×).
- Largest US gas producer; demand "roaring" from data centers and LNG exports; US gas "a fraction" of world prices (Canada at "extreme fire-sale levels"); a "vast and extremely valuable" gathering, transmission and distribution network.
EQT as an AI play — 50 GW and Japan
- "Among the best AI plays, especially for those who are averse to paying the type of lofty prices the usual suspects command." With ~50 GW of gas plants underway or planned, "it becomes hard to believe U.S. gas will stay around $3" (Asia and Europe >$20).
- Japan, "unlike many foreign countries who promised immense investments in the U.S. but are coming up short," is moving ahead with ~18 GW of gas-power commitments (the post writes "18 billion GWs"), equal to ~18 large nuclear plants. That includes a 9.2 GW Portsmouth, Ohio plant, the largest US gas plant ever. Most of it sits in or near EQT's footprint, and Japan is also a leading maker of gas turbines, which are in short supply.
- "We are rating EQT a Strong BUY."
The published tables
- AZN joins Buys (lot 9/18/2026 @ $166.29, B). PBR moves Buys→Holds/Trims (both lots H, highlighted). QNST is gone from Holds/Trims and is not on the Sells ledger.
- Re-ratings: NHPEF SB→B, SLB H/T→H (both highlighted); PALL's 04/15/2024 lot prints SB (B on Sep-14).
- Sells ledger unchanged (ACN, EWY, GS, IBM, XOM), with current prices re-marked.
3. In plain English
GNRC — Generac Holdings Positive
Generac is best known for the standby generators homeowners install for power outages, but the growth now comes from huge generators that keep data centers running when the grid fails. Every large AI data center needs backup power big enough to carry the whole building. Haymaker recommended the stock a month ago at about $186, and it is now around $205.
The news: Amazon signed a deal to buy up to $8 billion of Generac's generators through 2033, with $2.4 billion due in 2027–28. The clever part is that Amazon also got the right to buy Generac shares at a fixed $200.93, but only as it places orders. Amazon therefore profits as a Generac shareholder when it keeps buying from Generac, which gives it a reason to stay a loyal customer. Haymaker calls that the moat.
On price, the stock trades at about 18 times next year's expected profit. That is far below the 42 times investors paid in 2021, when a temporary home-generator boom was mistaken for a permanent one. The difference now is that the demand is signed and contracted. Analysts' price targets ($284–$295) were set before the Amazon deal, so Haymaker expects them to rise. Past dips in this stock have been good buying chances, the next test is the October 27 earnings report, and the rating stays Buy.
EQT — EQT Corporation Positive
EQT is the biggest natural-gas producer in the United States, mostly in the Appalachian region (Pennsylvania, Ohio, West Virginia), and it also owns pipelines that gather and move the gas. Haymaker bought it in March and April at $57–$65, and it has since fallen to about $50. The house admits the stock went down almost as soon as it recommended it, and says it is sticking with it anyway.
The argument is simple. The shares trade at about 12 times expected earnings, roughly 40% cheaper than the average S&P 500 stock, even though demand for American gas is rising fast from AI data centers (many of which will run on gas-fired power) and from gas shipped overseas as LNG. US gas costs about $3 per unit versus more than $20 in Europe and Asia, so Haymaker thinks US prices have room to rise. With about 50 gigawatts of new gas power plants being planned, plus a Japanese-funded buildout that includes a record 9.2 gigawatt plant in Ohio near EQT's operations, it sees EQT as a cheaper way to benefit from AI than the expensive tech stocks. The rating is Strong Buy. The risk is that the market keeps ignoring the story for a while, and it already has for months.
Summary derived from the paid Haymaker newsletter (text in transcript.txt, with the portfolio tables transcribed from the published images). For personal study. Not investment advice. © Haymaker / David Hay for source material.