Once upon a time, Wall Street loved companies that built their business plans on "rolling up" disparate players, consolidating them, and thereby growing revenues and earnings at a furious pace. Problem was, a lot of these companies had names like Tyco (NYSE:TYC) and WorldCom (now MCI (NASDAQ:MCIP)). And we know what happened with them.

Today, the pendulum appears to have swung toward the more rational view that companies that can grow their own businesses are preferable to companies that can't, and, therefore, buy other people's growth instead. Case in point: clothing retailer Children's Place (NASDAQ:PLCE).

The company reported its second-quarter 2005 earnings this morning, and Wall Street appears decidedly unimpressed, despite the amazing 68% growth in sales since Q2 2004. The reason: Almost all of that growth came as a result of Children's Place buying Disney Store-- from guess who? Disney (NYSE:DIS).

Of the $129.5 million increase in sales since this time last year, $103 million of the extra revenues came along with Disney Store, and just $26.5 million from Children's Place's pre-Disney core operations. Had Children's Place not made the acquisition, therefore, it's likely that revenues would have increased by just 14%, or at one-fifth their apparent rate. For a company that sports a trailing P/E of 28, that 14% growth rate and the 2.0 price/earnings/growth ratio it would have generated just don't do the trick for investors.

And that's not the only reason to dislike Children's Place's numbers. There's also the fact that despite the incredible artificial and respectable organic growth in revenues, the company still managed to lose $0.66 per share in Q2, 78% worse than last year.

However, that actually looks to be the extent of the bad news. And the fact that there's good news to be told here makes this Fool question whether the "organic growth" pendulum may have swung too far. For one thing, Children's Place posted 4% same-store sales growth in the quarter. Also, its cash levels are up more than $90 million over the past year, suggesting strong cash generation. And the company raised its forward guidance for fiscal 2005 by a nickel and now expects to earn $2.20 to $2.30 per share this year. Put it all together: While it would be nice to see Children's Place grow its pre-Disney business faster than it's been doing, this company probably doesn't deserve the 6% spanking that Mr. Market is giving it today.

Read more about Children's Place in:

Fool contributor Rich Smith does not own shares in any company named above.