Jehoshaphat Research says short shares of Toro Company

Jehoshaphat Research says it is short shares of Toro (TTC), a levered company “with a problem that’s off-balance sheet right now, but which will be on-balance sheet in the near future.” The firm believes Toro has sold hundreds of millions of dollars worth of excess product into its dealer channel, and that its cash flows have been propped up by its dealer financing JV, which pays Toro cash for selling into the dealer channel, regardless of whether the dealers need more product. The firm believes that Home Depot (HD) has made the decision to phase Toro out of its stores, and that investors will be caught completely off guard by this development.