Gencor : bad management or fraud?

Well, in my last post on Gencor Industries refreshing the “net-net” theory, Nate from Oddball Stock, commented regarding his issue with the company fiability and problems with the SEC.  After digging through some blog and the sec letters I decided to liquidate my position in GENC.

Here are some interesting facts or links making me back-off on GENC.

  • Links regarding Gencor story with the SEC questioning a lot of accounting principles and disclosure :  Letter 1, Letter 2 and Letter 3.
  • Oddball Stock analysis on gencor.
  • You may want to compare 10-K on the “accrual” portion of the assets.  There are huge swings from positive 500k to negative 3.6m in a year.  Accrual swings are prone to fraudulent calculations.  It is a big red flag.
  • Fraudulent case from EconThoughts.com.
  • Fraud case in 2001 against Gencor management still in place.
  • In every 10-Q or 10-K Gencor management blames government spending for their poor results.  It has been like that for years now.  They could have done something.

Well, I may miss a good net-net but if Gencor finally is a fraud I could lose everything and I estimate the chances at 50/50.   The first rule being “never lose money”, I can officially declare…

Disclosure : None, anymore.

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One comment on “Gencor : bad management or fraud?

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