Whenever you hear that a company is a "growth-through-acquisition story," you should be cautious. Investors tend to shun these types of stocks, as acquisitions bring plenty of risk. The acquired company may not generate the revenue growth that management had been banking on, or hoped-for cost cuts or other synergies may simply never materialize.
But a knee-jerk dismissal of these types of companies is a mistake, and investors instead need to differentiate between the two types of deal-making.
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