We still need to clarify some things noted in the report, but so far nothing in the report changes our long term view of the company. If we ignore the points designed to trigger reactions in the report, and only focus on the fundamentals of the company, and what it has accomplished in the past 15 years, we are not particularly concerned. Earnings growth has been VERY consistent for more than a decade. If one questions earnings quality, then looking at cash flow shows the same thing, though with a bit more variability with a small decline in cash flow in 2022 and 2023 from peak cash flow in 2020 and 2021. Free cash flow conversion is high. The report implies acquisitions are not being integrated well, but the growth and performance history would strongly disagree with this. Certainly issues like a whistle blower in India 'sound' bad, but are really not material to the company. The 'scandals' noted in the report are not as scandalous as they are made out to be. We also note net insider buying in the last six months. We are not saying it is perfect, but surely SprucePoint could come up with better names to short than a company that has executed very well in most respects for at least 10 years if not more.
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