Accounting red flags emerge across multiple names
SMCI moves to Forensic Alpha's maximum ‘10’ risk rating after its 10Q revealed extreme working-capital swings: receivables surged from $2.5bn to $11bn in one quarter, heavily concentrated in a single customer, while payables ballooned to $13.8bn, masking weak cash conversion. Bloom Energy also remains a top concern, with a widening gap between adjusted and statutory earnings, rising contract assets and growing reliance on off-balance-sheet JVs. NiSource’s score rose on higher DSO and advances to unconsolidated VIEs, while Cummins saw a jump in sales to equity investees to $1.70bn, with receivables outstanding from these investees of $523m, suggesting extended credit terms. Other stocks flagged last week include Amentum, Atlassian, Becton Dickinson, Ford and Impinj.
Edition: 230
- 20 February, 2026
Summer of disconnect as energy transition stumbles
Industrials
Renewables are the future but the transition is being fumbled - due to the nature of its products Northcoast sees Generac (TP $292; 20% upside) as having the most near-term opportunity and Chart Industries (TP $209; 20% upside) winning as it benefits from the growth in small-scale LNG projects that are often used for utility load management solutions. Looking over the horizon, Bloom Energy (TP $23; 40% upside) and Capstone Green Energy (TP $7; 160% upside) will find success thanks to their unique power generation solutions.
Edition: 136
- 27 May, 2022
Bloom Energy (BE US) US
Industrials
Northcoast recently expanded their coverage to include the Clean Technology space. BE is one of their preferred plays - its solid oxide module requires little modification to enter multiple applications with a TAM of over $2.6tn. Discusses BE’s disruption of the centralised grid model and its best-in-class electrical efficiency (at rapidly reduced costs). With an experienced management team and multi-year revenue opportunities, BE is ideally placed to benefit from the global shift to alternative energy generation and hydrogen use. TP $35 (50% upside).
Edition: 108
- 16 April, 2021