Interesting that the SGR updated, table below, appears considerably below 1H consensus estimates, against both EBITDA and adjusted net income, and yet the stock hasn’t traded too badly.

I would have expected considerably worse (at present, down a few percent).

The provision for wage underpayments, over the past 6 years, is relatively modest, and potentially lower than the market feared. It is also fair to say that the market never found a wage underpayment it didn’t like (as it meant more profits) and it is also possible to image that SGR is getting as many prospective skeletons out of the way, into the open, and resolved ahead of the casino & gaming inquiry that first CWN and now SGR are undergoing.

The above amounts to little more than thinking out aloud, we can’t possibly know, but the market reaction is interesting nonetheless.

SGR is a cheap stock with very minimal embedded expectations, and it is plausible that the new news (the amounts) are simply better than the market initially feared.

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