(Bloomberg) -- Carson Block, the short-seller and founder of research firm Muddy Waters LLC, revealed a new short position in construction group Tutor Perini Corp.
The company bleeds cash on working capital and has a disproportionate level of client disputes in the form of claims and unapproved change orders, Block said Wednesday at the Sohn San Francisco Investment Conference. Meeting earnings estimates depends on resolving such disputes favorably, he said, and the lack of free cash flow may hurt its borrowing.
Tutor Perini constructs commercial buildings, including hotels and casinos. The Sylmar, California-based company has a market capitalization about about $1.1 billion. Shares of Tutor Perini have climbed 33 percent this year.
A representative of Tutor Perini didn't immediately respond to a request for comment.
Block said he suspects the builder's accounting and business practices are “quite aggressive.” He also questioned share sales by Ronald Tutor, the company's chairman and chief executive officer.
Block's influence began growing five years ago with a series of successful short-selling campaigns against Chinese companies listed in North America. The biggest was Sino-Forest Corp., the Hong Kong-based tree grower whose market value declined to nothing from more than $6 billion after Muddy Waters questioned its accounting.
In August, Block revealed he had shorted St. Jude Medical Inc., releasing a report that questioned the security of its cardiac devices.
To contact the reporter on this story: Beth Jinks in San Francisco at bjinks1@bloomberg.net. To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Elizabeth Wollman, Dan Reichl
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