i'm looking forward to financial results

I was only looking at my model for SGN today and reflecting on the $180m (including deferred amounts) of acquisitions made during and since the GCF. Since most of these transactions were essentially the buying of additional stakes in agencies in which SGN was already invested and whose business models was well-known to SGN executives, means that the scope for poor acquisition outcomes are probably limited (I?m not a fan of growth by acquisition, but I am more relaxed when companies buy businesses that the know intimately, and especially when they do so in times of economic slowdown/distress when vendor expectations are diminished, which I feel was overwhelmingly the case here).

I think if there was any company that had scope to exceed market expectations this reporting season and over the next year or so, it is SGN, because I don?t think analysts fully appreciate the fact that there are a number of newly acquired business stakes that will be making far stronger financial contributions that when they were acquired over the past two years.

My assessment is that analysts are simply providing in their forecasts for growth in the core SGN business, without properly accounting for the earnings uplift from the additional stakes acquired during the downturn in the advertising cycle.

And it?s not an immaterial quantum that is involved, either...it is $180m in total acquisitions in the context of a $380m size company.

The SGN result is one that I am most looking forward to during this upcoming reporting season.

Even after the stock's re-rating over the past 6 months, with valuation multiples of FCF/EV of 11.5%, EV/EBITDA of 5.0x and P/E of 9.6x, the stock is still undervalued, in my opinion.

Prudent Investing

Cam