Great week, great year so far. Gencor is up 12% for the week and 49% ytd. Thank you FAST Act . GVA, USCR, VMC, ASTE and MLM are on fire too.
I have a recommendation for Dunkin. How about selling fresh donuts and muffins. After numerous trips in the morning for coffee and a stale muffin or donut, I stopped going. Krispy Kreme always sells fresh donuts.
Why doesn't Dunkin focus on providing fresh products? Do they take unsold product from the prior day and sell it the next morning. Certainly tastes like it.
I think it will hit 37 before it hits 17. WFM will continue to be the leader in organic groceries.
Mario's fund - Teton Westwood owns 350,000 shares of GENC. Looks like he has owned it for a few years. This is the first time I think he has mentioned Gencor on CNBC. I like that he has his money where his mouth is.
Bloomin Brands is a well run company, with a great product and a loyal customer base. Below $16 is a great long term buyin price.
Gencor Impresses, And Its Future Looks Bright:
Today, Gencor delivered on my predictions. Indeed, it beat even what I could ever expect, in terms of improvement.
Better still, there already clues that make it likely the next quarter will be good as well.
In a recent article on Gencor (NASDAQ:GENC) titled "Gencor Industries: At The Very Beginning Of Substantial Growth And Earnings Improvement", I explained my bullish thesis on the name. This thesis was based on 3 main factors:
• The catalyst brought about by lower crude prices, which made asphalt more competitive versus concrete.
• The catalyst brought about by the new Highway Bill.
• And GENC's valuation, where nearly all of the market capitalization was backed by cash.
I explained that due to the catalysts at hand, Gencor would, in the very short-term, start delivering a significant improvement in revenues and earnings.
Today, we got the first taste of what constitutes Gencor's delivery on my predictions. Gencor released Q1 FY2016 earnings, and these brought the following developments:
• Revenues increased 111% year-on-year.
• Gross margins increased from 5.5% of revenues to 24.8% of revenues, a massive improvement which exceeded anything I could ever expect.
• The company turned from an operating loss during Q1 FY2015, to $1 million in operating income for Q1 FY2016.
Also, while it can seem less relevant, GENC continued increasing its cash even in spite of the massive growth it's experiencing now (which consumes some cash). Once this growth stabilizes at more reasonable levels, it's likely that the cash balances will increase further still.
Gencor Will Keep On Delivering
As important as Gencor delivering on my thesis, is the fact that it's likely things will continue to improve even more. We have a couple of clues pointing that way.
Gencor had already ended Q4 FY2015 with a large increase in backlog (to $20.3 million). Well, during Q1 FY2016 this increased further still:....
Good Seeking Alpha article from last week on Gencor. Paolo should have also mentioned that even though the company's revenues declined by over 50% from 2008, Gencor was profitable every year except one year. Now they appear to be lean and ready to ride the highway bill.
Jan. 6, 2016 11:46 AM ET
We have reason to believe Gencor Industries is at the very start of a large favorable cycle.
This reason is underscored by two very obvious catalysts.
We also have concrete evidence that the company is already seeing improvement and the improvement will become evident when it reports Q1 FY2016 earnings.
Sometimes, circumstances align in such way that a significant cyclical bottom can be predicted with a high degree of certainty. Such is the case with Gencor Industries (NASDAQ:GENC). After several years (since 2012) of declining revenues and operating income, GENC is at the very cusp of a significant reversal in fortune.
What is more impressive is that because of a couple of factors, this reversal is plain to see. Yet the company still trades for not much more than cash on hand. This article will cover GENC's unique circumstances.
GENC's main business consists of manufacturing and selling equipment used to produce highway construction materials, namely asphalt.
Thus, GENC sells machinery to highway/road construction companies. Its fortunes are dictated by investment in highways and roads, especially if such construction uses asphalt as a paving material.
After a prolonged decline in business activity, GENC is at a point where it's hardly printing positive EBITDA. During FY2015, it had barely $0.5 million in EBITDA (though EBITDA was still positive).
Its business, as the business for most equipment/capex sellers, is cyclical. This means that seeing very low profitability (as measured by EBITDA) at the bottom of a cycle is not that surprising. It also means that using EV/EBITDA as a measure of value is strongly misleading at this point.
The non-GAAP charges were $5.7M integration & acquisition expenses (one-time) and $9.3M earn-out expenses.
I am very pleased with the top performance this quarter. Also, they being so far ahead of the integration of PMFG bodes well for CECE. PMFG was so bloated. I can see CECE going back to 13-14 by early next year.
What am I missing? GBX opened up strong after earnings guidance and a large order. Then dropped faster than it opened up. I had to buy more on the drop back to 35. Is there any news that is negative today?
Sentiment: Strong Buy
I will never own ESV as long as current leaders are in place. In their January conf call they were bragging about their long-term contracts and implying that the healthy dividend was safe. They couldn't have been any more wrong. If senior leadership can't see 3 - 6 months ahead, that is scary.
Too many other national and local flooring suppliers will continue to take advantage of LL bad situation. Since there is no telling what the fallout in decline and sales and legal troubles, this is definitely a stock to avoid.
KKR with all of their investment experts clearly have made some poor investments and the stock is showing it. I think KKR still goes lower as they writedown more of their investments this year.
Eric clearly has a handle on Gencor's financial management and is likely an astute investor. His last trade in 2014 was selling stock after Gencor reached a 5 year high. Now he appears to have more than doubled his holdings. To me, this is a better buy signal than getting an analyst buy rating.