Great post Croasian. I have a question and wondering what your thoughts are.
My understanding of the history of SGH is that a lot of the growth in revenue came through acquisitions. These are called roll-up mergers and with the assistance of some accounting trickery it is very easy to hide poor organic growth or performance in the underlying business when these are frequently happening.
In any case I'm wondering if the growth in revenue and profits was mostly as a result of these roll-up mergers or was the underlying business organically growing market share and improving efficiency.
This leads to the more important question which is if SGH will be able to grow revenue in the future if they are unable to continue to acquire smaller practices?
In absence of this strategy, the only way this would be possible will be to win market share from other companies. If they haven't been doing this successfully in the past and were relying mostly on acquiring smaller firms and given the hit their reputation has taken, this could take some time to get back on track.
What are you thoughts?
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