(Un)Intelligent Investor Article

I'm fuming over an article published last week in Intelligent Investor. I was actually attracted by the title ("Why I dislike g8 Education"), hoping to read some critical thinking about concerns with GEM (and there are a few). Instead, I read a piece of fluff so superficial that I'm fumed the writer is allowed to pass off as a financial expert. Here is the link to the article, followed by my comments:
https://www.intelligentinvestor.com.au/why-i-dislike-g8-education

Here are the flaws that seriously undermine the validity of this article (IMO):

1. "Staff numbers are regulated and centres themselves aren't scalable." Same with hospitals and some other favorite investments! Like childcare centres, RHC, PRY, and other medical centre firms have relatively fixed costs per patient -- there are laws/rules/safety limitations on how many patients you can funnel into beds without increasing staffing and space costs. Hospitals also have some degree of regulated pricing or insurer pressure (less so in childcare, but there are pricing limits). If you want to avoid costs increasing with growth, buy only software and Web-based firms. They can scale up with minimal additional costs, compared with most services firms. But services firms can be good investments, too!

2. "[Buying unlisted centers with low EBITDA] creates no value and does little more than engage in 'multiple arbitrage'". Based on this logic, avoid firms that grow through undervalued acquisitions. Fact is, companies can prosper by acquiring firms for less than organic growth. 4x EBITDA is quite good, actually. Also, GEM doesn't "sell to shareholders at a far higher multiple". GEM is its shareholders -- shareholders bought the independent operations in the first place.

3. "There is no one brand name to build"? On the contrary. Parents want to trust the childcare service they use, and companies have the potential to build that trust through branding as well as all-important operating systems and culture to support the brand promise. Lone childcare centres are more challenged at trust-building due to the costs of branding and fewer systems in place to support the quality. G8 has a handful of positioned brands (differentiating learning style, care style, price points, etc). Not sure if G8 has mastered branding, but parents will be attracted to a childcare brand they can trust.

4. "few, if any, synergies from owning multiple child care centres." Nonsense. The gov't requires specialists for a set number of children. Lone centres can't provide that specialisation efficiently, let alone the well-known synergies through mutual learning of employing several specialists (lone centers would have one specialist). Also, larger firms have lower borrowing costs and more competitively priced outsourced services (cleaning, etc) than do lone operators. Smaller issue, but G8's latest report shows head office costs per place have dropped by 2/3 over the past five years.

5. "investors are paying 30x earnings". Not true. FY15 PE is 15x using Thomson/Reuters broker consensus database. Trailing PE is an inappropriate metric when a company has grown by 70 percent in one year!

I don't want to sound like a fanboy for GEM. The company has risks worth monitoring, and this article touches on some of them. But the valid concerns are sadly buried under the writer's emotional distortion and flippant style.