This infrastructure company is set to benefit from new highway construction.
Gencor Industries Inc. (GENC)
From Stock Selections & Timing
Stock Selections & Timing is dedicated to finding deep value stocks.
Our top stock pick for 2016 is Gencor Industries Inc. (GENC). GENC produces highway construction materials like asphalt. It should benefit from the recently passed 5-year $305 billion highway construction bill. There are numerous state initiatives, like Proposition 7 in Texas that should also benefit the company.
The company has a pristine balance sheet. GENC has two classes of stocks with a total of 9.5 million shares issued, and the shares trade at about $11.50. So this is a very small company with a micro-cap market cap of $109 million.
Be careful if you buy or sell it, to only use limit orders.
The company has no debt and cash or cash alternatives of $95 million. Revenues for the latest fiscal year ending September 30, 2015 were $39 million, with an operating loss of less than $1 million.
Based on the newly passed construction bill, we expect sales to surge in 2016. The company is well run. We expect net earnings to exceed $0.75 in fiscal 2016.
Buy up to a limit of $14 with a 12-month target of $24.
Stephen L. McKee, Stock Selections & Timing, www.investmentst.com, 800-800-6563, December 30, 2015