TSCO - Important Update

When I was researching for the article on TSCO that was published yesterday, the last thing on my mind was to run the Beneish M-Score on TSCO. You can judge that by how I ended the article. What got me really intrigued was all the double talk and all the gobbledygook answers where the management was tripping all over themselves.

I was kicking myself for not having run the check on TSCO yesterday. My bad. So I decided to run the test on TSCO today. Result? “Likely Manipulator”. This is a serious deal. For the uninitiated, the M-Score was used by students at Cornell to flag Enron as a fraud in 1998. Everybody laughed at them; the rest is history.

The last time I ran the Beneish M-Score and a company failed with the same result—actually, two companies failed it—was on February 25, 2024. The two companies were SMCI and TSLA.

It took me three months to get all the details on SMCI, and the rest is history. As for TSLA, even Dr. Beneish has it as an example of possible fraud on Indiana University’s Kelley School of Business’s site these days.

Just because a company fails the Beneish M-Score test doesn’t mean shenanigans are going on; however, if you are an institutional investor, you better hire forensic accountants ASAP to investigate the company. As for retail investors? I would find the nearest exit.

I can’t tell you exactly what is going on at TSCO at this time. I read through the 2024 10Qs and 10K a few times already. I have some guesses, but they are just guesses. Only an auditor or a forensic accountant with access to TSCO’s books and internal procedures can ascertain if and where there is an issue.

Accussing somebody of fraud is a serious matter. Even with SMCI, I didn’t accuse them of fraud; the burden of proof for that is very high. All I did was point out where to look.

You can run the Beneish M-Score on Indiana University’s Kelley School of Business’s site.