We’ve recently been using the GuruFocus Benjamin Graham Net Current Asset Value Screener (subscription required) to generate regular watchlists of net net stocks. The GuruFocus NCAV screen has some superb functionality that makes it possible to create the watchlist from the screen and then track the performance of those stocks. We created our first watchlist on July 7 of this year using the July 6 closing prices. The performance of the stocks in that first watchlist over the last quarter has been nothing short of spectacular. Here is a screen grab (with some columns removed to fit the space below):

Current position

I think Gencor (GENC) needs my dad. He was Director of Investor Relations for a Fortune 500 company and taught me a lot about how companies manage their stock and communicate with the investment community, whether it's an analyst for Goldman Sachs or an everyday investor like you and me. I once heard him say "never complain, never explain." I was 15 at the time and didn't quite understand it, now as I peruse the press release from Gencor it all makes sense.

There are some things you don't say in a press release. You don't want to sound angry and you don't want to sound defensive. Let me take a line from the first paragraph of Tuesday's press release:

One of the reason smallcaps can be so lucrative is that they receive very little media or analyst coverage. Unfortunately, it can also be why you can suffer horrific losses when you do not know the reasons behind the price movements in your stock.

Gencor Industries (GENC) is at the forefront of two major bull markets, namely infrastructure and agriculture. The Orlando-based heavy machinery maker manufactures asphalt plants, soil remediation plants, combustion systems and screening equipment for the road and highway construction industry. They are working on developing different biomass fuels, waste fuel recovery, asphalt recycling etc. The pending global infrastructure upgrade cycle and agricultural secular growth trend should allow this company to benefit from a myriad of fronts. Management has had an excellent track record of creating shareholder value, namely by eliminating most debt, by maintaining a steady growth in R&D spending and by continuing to grow its core businesses.

Nevertheless, small companies do often incur unforeseen capital expenditures, delays in orders and temporary R&D expenses in an effort to better position themselves for the long-term. While GENC has consistently met and exceeded Wall Street expectations, it just reported a dismal quarter. Nevertheless, the company still managed to earn $1.50 for the trailing 6 months. Even after the miss, it is quite conceivable for the company to earn $3 in 2008 and for it to resume its growth trend after that.