Generac Holdings Inc., a prominent energy technology company, experienced a downturn in its stock performance during the fourth quarter of 2025, negating some of the substantial gains achieved in the preceding third quarter. This shift was noted by Pelican Bay Capital Management (PBCM) in their investor letter, leading them to consider increasing their holdings if the stock price continues to decline.
Generac's Q4: A Strategic Reassessment for Investors
Pelican Bay Capital Management's Q4 2025 Performance Review
Pelican Bay Capital Management (PBCM) delivered an impressive fourth-quarter performance in 2025, with its Concentrated Value Strategy achieving an 8.5% return, significantly outpacing the Russell 1000 Value Index's 3.8%. This robust growth was largely propelled by the strong showing of AI-related stocks and strategic exposure to commodities. For the entire year, the Strategy yielded a 20.6% return, surpassing the Index's 15.9%. PBCM's investment philosophy centers on identifying high-quality companies with solid financial foundations. Investors can gain further insights into the firm's top five selections for 2025 by reviewing their detailed investor letter.
Generac Holdings Inc. Navigates a Challenging Fourth Quarter
Generac Holdings Inc. (NYSE: GNRC), a leading manufacturer and distributor of energy technology products, was among the underperforming stocks in PBCM's portfolio during the fourth quarter of 2025. Despite a challenging quarter, Generac's stock closed at $183.53 per share on February 6, 2026. The company still recorded a positive one-month return of 17.20% and an impressive 26.51% increase over the past twelve months, maintaining a substantial market capitalization of $10.77 billion.
PBCM's Strategic Outlook on Generac's Valuation and Future Prospects
In its fourth-quarter 2025 investor letter, PBCM specifically addressed Generac Holdings Inc.'s (NYSE: GNRC) performance, noting that the stock, along with Brown-Forman (BF.B), experienced a decline after their strong third-quarter rallies. PBCM expressed satisfaction with Generac's reversal, as the stock had reached the upper limit of their fair value estimate, prompting them to reduce their position to a minimum size. The firm indicated a willingness to seize the opportunity to increase their holdings should Generac's shares continue to fall in the current quarter, signaling a strategic readiness to capitalize on potential undervaluation.
Beyond Generac: Exploring Opportunities in AI and Onshoring Trends
Generac Holdings Inc. (NYSE: GNRC) does not feature on our curated list of the 30 Most Popular Stocks Among Hedge Funds. While 54 hedge fund portfolios held Generac at the close of the third quarter, an increase from 51 in the previous quarter, our analysis suggests that certain AI stocks offer more significant upside potential with reduced downside risk. For investors seeking highly undervalued AI opportunities that could also benefit from Trump-era tariffs and the growing onshoring trend, we recommend exploring our complimentary report on the top short-term AI stock. Additionally, for a comprehensive overview of hedge fund strategies and insights, readers can consult our Q4 2025 hedge fund investor letters page, which includes discussions by prominent figures like Jim Cramer on Generac and other stocks.
