Been watching this stock a while, but no position. I like the...

Been watching this stock a while, but no position. I like the macro picture - humanisation of pets is a profitable business and I don't see this decreasing.

Started doing some homework today on GXL. One of the big things that jumped out at me and that I really don't like, are all the Intangibles on the Balance sheet - from 1H'18 report, $591M of the $969M "Assets", were Intangibles.

Of that $591M number, $41.3M were software, brand names (I assume their 'home brand'? Do they have any exclusive brand distribution licenses? If so, they can't be too significant, cause the value was only $1.3M) and customer relationships (I assume their loyalty program). Refer Note 8 of the Report. I don't really have a problem with this $41M number - but the remainder, excluding the amortisation, some $555M in Goodwill? Wow. Way too high as a % of their Assets, for my comfort zone. I understand they've grown through acquisition and so expected them to have a chunk of goodwill - but that's a 'big' chunk. Makes me wonder if they overpaid, for those acquisitions?

I see the Trading Update yesterday referenced $16-20M of non-cash impairments. I need to read up a more about this - but I would be a lot more comfortable going long, if they'd cut that large Goodwill number down significantly (say 1/2?). It would make for a God-awful FY18 non-cash impairment though and would have been quite the introduction, for the new CEO - but it seems like a lot of risk to be carrying on the Balance Sheet IMO. Maybe the fact that the new CEO didn't, when this was his prime opportunity to do so and set a baseline, says something (i.e. my fears are unfounded?).

I do think there's a lot to like about GXL though, so plan to keep doing my homework on them, before deciding if I want to jump in.