Darspal S Mann
Long/short equity, growth at reasonable price, special situations, deep value

ExamWorks: Deeper Financial Examination Poses Pertinent Questions

ExamWorks Group Inc. (NYSE:EXAM) is trading close to its all-time high, flying high on the promise of the company emerging as a consolidator in the highly fragmented Independent Medical Examination (IME) industry. Theoretically, growth via acquisitions and earnings improvement through operations consolidation is a great business model, especially if your stock is trading at 20 times EV/ EBITDA and you can acquire businesses at 5-7 times EV/EBITDA. But before joining the party, there are some fundamental and financial questions that should be answered.

The bull side thesis is built upon the idea of a consolidator disrupting the fragmented industry and the whole business model can be summed as:

    Growth via acquisitions Operating leverage via scale and efficiencies Create ...
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