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.