mankap Posted July 9, 2012 Share Posted July 9, 2012 Looks like the sales team that Ebix hired last year is showing results. Link to comment Share on other sites More sharing options...
Liberty Posted July 9, 2012 Author Share Posted July 9, 2012 Looks like the sales team that Ebix hired last year is showing results. Indeed, and in channels that haven't been getting as much love lately. Definitely good to see. Link to comment Share on other sites More sharing options...
Liberty Posted July 26, 2012 Author Share Posted July 26, 2012 http://www.marketwatch.com/story/ebix-to-announce-second-quarter-2012-earnings-on-august-7-2012-2012-07-26 ATLANTA, July 26, 2012 (GLOBE NEWSWIRE) -- Ebix, Inc. a leading provider of On-Demand software and E-commerce services to the insurance industry, today announced that it plans to release its 2012 second quarter earnings results on Tuesday morning, August 7th and will host a conference call to review the results at 11:00 a.m. EDT the same day (details below). The call is open to the general public. US Dial-in #: +1 (877) 837-3909 International Dial-in # +1 (973) 409-9690 Passcode: 5770340 Please call five minutes in advance. Audio Replay: Will be available at http://www.ebix.com ; click on Investor Home Page -- after 2:00 p.m. EDT on Tuesday, August 7th . Link to comment Share on other sites More sharing options...
mankap Posted August 7, 2012 Share Posted August 7, 2012 Hugely positive 2Q Revenue at 47.7 m better than expectations.It contains only one month revenue for Planetsoft and Finetechnix.I expect 3Q revenue could be >50m.I am looking at $2.00 as EPS for 2012.Aanlysts will be revising their estimates soon. No. of diluted share is at 38.8m .Buybacks are continuing.A total of 800k shares bought back since April.Good thing is that company is buying back at current prices also. DSO days are coming down. G&A expenses went up more than I would like to see.Probably a function of the two acquisitions.This brought the operating margin down. Link to comment Share on other sites More sharing options...
Liberty Posted August 7, 2012 Author Share Posted August 7, 2012 http://www.ebix.com/pressrelease_text.aspx?artid=246 8) Now let's just see if the shorts can make it go down in price like they usually do on earning day.. Link to comment Share on other sites More sharing options...
Liberty Posted August 7, 2012 Author Share Posted August 7, 2012 Up over 6% right now. Is it finally the beginning of a short squeeze? 11 million shares sold short last I checked.. But after the past year and a half.. I'll believe it when I see it. Chances are it'll come back down (not that I care -- more time for buybacks. In fact, I wish price would stay low for longer so they could do better buybacks..), but we'll see. Link to comment Share on other sites More sharing options...
alpha231616967560 Posted August 7, 2012 Share Posted August 7, 2012 Good conference call. I like what Robin said about the healthcare exchanges, which was essentially that 'this is early days...'. I continue to appreciate the measured approach of this company. The message is: Let's not compromise on fundamentals like margins and too many eggs in one basket. Let's focus on cross-selling to an impressive customer base and executing strategy (i.e. exploiting and building on network effect through the exchanges). It is a rare CEO who actually walks this talk. I wish that I had doubled my initial stake at $15, but I think that this company represents an excellent value at today's price and I'll continue to average in. Link to comment Share on other sites More sharing options...
Liberty Posted August 7, 2012 Author Share Posted August 7, 2012 Good conference call. Pretty much everything I heard made me confident in the company's future and direction, and there are still a few things right over the horizon that should keep things interesting (two new big exchanges still haven't launched, and they apparently have very long lists of customers already signed in, and full quarters with new acquisitions once the consolidation/cost-cutting is done should have a nice impact). I liked Robin's comments about health exchanges. Basically, whether there are public health exchanges or not won't change that health exchanges are here to stay, either as private + public or just private, and they're positioning themselves to get their share of that. Robin mentioned that he'd like to make a few more acquisitions this year, and usually when he says that it means the deals are pretty much already done and we just have to wait for the official press release :) Also nice to see them do pretty well in such a soft environment for their customers (which affects transactions on exchanges, IT upgrades, and BPO levels (esp. the construction industry)). When we get to a stronger macro environment and hard insurance market, I believe this company will be an absolute monster, and with such high margins, they'll have tons of cash to either reinvest or spend on buybacks/dividends. Totally different model from, say, Salesforce.com with its tiny (or non-existant) margins. And off course, the shorts have to cover someday, and trying to buy 11 million shares from a shrinking float will be fun to watch... Link to comment Share on other sites More sharing options...
Liberty Posted August 8, 2012 Author Share Posted August 8, 2012 Looks like the shorts were a day late this quarter. Going down a lot on high volume so far this morning... Maybe the guy who's in charge of manipulating the stock was out sick yesterday... Oh well, just one more opportunity for buybacks. Link to comment Share on other sites More sharing options...
alpha231616967560 Posted August 8, 2012 Share Posted August 8, 2012 Looks like the shorts were a day late this quarter. Going down a lot on high volume so far this morning... Maybe the guy who's in charge of manipulating the stock was out sick yesterday... Oh well, just one more opportunity for buybacks. [/quote Yup it seems go happen like clockwork every earnings report. I wish that I understood the motivation more. It seems futile in the long term to short a company like this, but it keeps happening. I don't get what makes Ebix such a seemingly attractive target. Link to comment Share on other sites More sharing options...
mankap Posted August 8, 2012 Share Posted August 8, 2012 You are right.Normally shorts attack just after the qtrly conf call. I was expecting a attack yesterday. Link to comment Share on other sites More sharing options...
Liberty Posted August 8, 2012 Author Share Posted August 8, 2012 Looks like they hit the 10% short sale rule for today. I wonder if they'll try agan tomorrow.. Link to comment Share on other sites More sharing options...
Liberty Posted August 8, 2012 Author Share Posted August 8, 2012 Yup it seems go happen like clockwork every earnings report. I wish that I understood the motivation more. It seems futile in the long term to short a company like this, but it keeps happening. I don't get what makes Ebix such a seemingly attractive target. Who knows? It could be based on technicals and such voodoo. Or maybe it's a private competitor doing this..? Can't really know. I believe that if the shorts had good reasons based on fundamentals, they would share them. If you had 11 million shares short and had something substantial, would you keep it a secret for this long? That info would have been in the Copperfield hatched job or in another short report. But everything I've seen is BS and distortions, so I don't think they have anything real. Just a lot of resources to manipulate the secondary market price in the short term and no moral qualms about lying, but nothing to actually hurt the business itself. That's fine with me, because it allowed me to get in low, it allows the company more buybacks, and it leave the potential of a massive short squeeze in the future. They're actually making my investment more valuable, not less. So they can keep going if they want to. Link to comment Share on other sites More sharing options...
alpha231616967560 Posted August 8, 2012 Share Posted August 8, 2012 Yup it seems go happen like clockwork every earnings report. I wish that I understood the motivation more. It seems futile in the long term to short a company like this, but it keeps happening. I don't get what makes Ebix such a seemingly attractive target. Who knows? It could be based on technicals and such voodoo. Or maybe it's a private competitor doing this..? Can't really know. I believe that if the shorts had good reasons based on fundamentals, they would share them. If you had 11 million shares short and had something substantial, would you keep it a secret for this long? That info would have been in the Copperfield hatched job or in another short report. But everything I've seen is BS and distortions, so I don't think they have anything real. Just a lot of resources to manipulate the secondary market price in the short term and no moral qualms about lying, but nothing to actually hurt the business itself. That's fine with me, because it allowed me to get in low, it allows the company more buybacks, and it leave the potential of a massive short squeeze in the future. They're actually making my investment more valuable, not less. So they can keep going if they want to. Yes. Like you, I reassure myself based on the fundamentals and what I know. I've read everything I can get my hands on about this company and their competition. I just can't know what I don't know. To me, it isn't satisfying to simply write it off to something or other that is not understandable. It certainly seems like a game that the short side understands, so I'm wanting to learn what the game is. Link to comment Share on other sites More sharing options...
Liberty Posted August 8, 2012 Author Share Posted August 8, 2012 Yes. Like you, I reassure myself based on the fundamentals and what I know. I've read everything I can get my hands on about this company and their competition. I just can't know what I don't know. To me, it isn't satisfying to simply write it off to something or other that is not understandable. It certainly seems like a game that the short side understands, so I'm wanting to learn what the game is. I'm not saying there is no risk or that it is an optimal situation, but I have to make a call with the info that I have and reasonable inferences on what I can't know. I wish I could sit down with one of the shorts and interview them candidly about their position, but that's not going to happen. When you don't have anything, you always look more menacing when you don't say anything and let people imagine that you have more than you actually do. Their strategy right now seems to be to scare the shareholders who get their guidance form Mr. Market (and sadly, that's a lot of them). They do this by making the price drop on earnings and other positive news, so that the herd thinks "oh, this must be bad news since the market is reacting negatively", and trying to get the momentum people scared (if something goes down enough, they'll sell regardless). That's all I can see right now. Link to comment Share on other sites More sharing options...
abcd Posted August 8, 2012 Share Posted August 8, 2012 Yes. Like you, I reassure myself based on the fundamentals and what I know. I've read everything I can get my hands on about this company and their competition. I just can't know what I don't know. To me, it isn't satisfying to simply write it off to something or other that is not understandable. It certainly seems like a game that the short side understands, so I'm wanting to learn what the game is. I'm not saying there is no risk or that it is an optimal situation, but I have to make a call with the info that I have and reasonable inferences on what I can't know. I wish I could sit down with one of the short and interview them candidly about their position, but that's not going to happen. When you don't have anything, you always look more menacing when you don't say anything and let people imagine that you have more than you actually do. Their strategy right now seems to be to scare the shareholders who get their guidance form Mr. Market (and sadly, that's a lot of them). They do this by making the price drop on earnings and other positive news, so that the herd thinks "oh, this must be bad news since the market is reacting negatively", and trying to get the momentum people scared (if something goes down enough, they'll sell regardless). That's all I can see right now. First of all thanks for this thread and the continuous updates on this investment opportunity. May be it is me, but I have a feeling whenever I follow a stock that is targeted by shorts, I lost (either money, if I had invested or just my side when I rooted against the shorts) The recent examples are ATPG, SVU (both cases of probable bad executions). Like you were saying, in these cases, I saw very few well articulated short arguments but nevertheless they won (so far). I am hoping EBIX will be different and longs win. What was particularly annoying was the 'anonymous' article on seeking alpha about 15 or 16 months ago, which caused the stock to drop from ~29 to ~22 in a matter of minutes. None of those issues raised were proven to have any merit so far. For a brief time, I thought this is one of the downsides of first amendment. Good luck and thanks for the updates and comments. Link to comment Share on other sites More sharing options...
Liberty Posted August 8, 2012 Author Share Posted August 8, 2012 May be it is me, but I have a feeling whenever I follow a stock that is targeted by shorts, I lost (either money, if I had invested or just my side when I rooted against the shorts) The recent examples are ATPG, SVU (both cases of probable bad executions). Like you were saying, in these cases, I saw very few well articulated short arguments but nevertheless they won (so far). High short interest is definitely a red flag. There's a higher burden of proof on you as investor once you see that; you basically have to say, do I have an edge over these people who are ready to put up large sums of money betting against me? I certainly don't take this lightly. But even after I've become convinced the shorts are wrong on the fundamentals, it would still be possible for them - in theory - to end up being right by hurting the company via the share price. I believe that EBIX can withstand that much better than many other businesses because of its high FCF generating-ability, low debt, and good capital allocator at the helm. If it was a highly-levered company, or in a very cyclical industry, or with only a few big customers that could make or break things, or if it needed to regularly go to the capital markets to fund growth and acquisitions, or if it were particularly vulnerable to competition, or if it wasted capital on overpriced acquisitions and operations, I would be worried. But as things are, they can sit there indefinitely and collect their highly diversified, moat-protected recurring revenue stream at 40% margins, buy back shares while reinvesting in the business, while executing what I think is a very smart growth strategy. So I don't think they are vulnerable to share price volatility in the way that some other companies are (ATPG and SVU have very different margin, capex, and debt profiles, among other differences), and IMO this closes the door on the shorts hurting the business. Link to comment Share on other sites More sharing options...
prunes Posted August 8, 2012 Share Posted August 8, 2012 Not surprised by the high short interest given the number of red flags: weak auditor, auditor change, frequent acquisitions can be used to distort cash flow sustainability, reports of poor internal controls. These are all items that were pointed out by Kerrisdale. Still valid flags though IMO. Sure there are other items I'm missing too. Link to comment Share on other sites More sharing options...
Liberty Posted August 8, 2012 Author Share Posted August 8, 2012 Not surprised by the high short interest given the number of red flags: weak auditor, auditor change, frequent acquisitions can be used to distort cash flow sustainability, reports of poor internal controls. These are all items that were pointed out by Kerrisdale. Still valid flags though IMO. Sure there are other items I'm missing too. That's what makes this a great opportunity. The 'first glance' story looks like what you just said, but if you actually dig into each of those, it looks different, and what will matter in the end is not the 'first glance' look of things but the actual fundamentals. It reminds me of a quote by I don't remember who: "I like things where the 1 hour complicated explanation of a stock is dramatically different than the 30 second explanation." (the reason for that of course is because it allows you to get an edge over those who won't dig deeper) Personally, I've been satisfied with what I found doing my due diligence, and EBIX is my biggest position. Time will tell... Link to comment Share on other sites More sharing options...
mankap Posted August 15, 2012 Share Posted August 15, 2012 Another acquisition.All paid with cash.No shares have been issued. http://www.nasdaq.com/article/ebix-takes-strategic-position-in-london-with-the-acquisition-of-reinsurance-trading-hub---trisystem-20120815-00191 Link to comment Share on other sites More sharing options...
Liberty Posted August 15, 2012 Author Share Posted August 15, 2012 Another acquisition.All paid with cash.No shares have been issued. http://www.nasdaq.com/article/ebix-takes-strategic-position-in-london-with-the-acquisition-of-reinsurance-trading-hub---trisystem-20120815-00191 Seems like a good one at first glance. They did mention on a recent conference call that they intended to strengthen their presence in Europe, and this seems like it does exactly that right in their core exchange business. And once they are in there, they have lots of things to cross-sell (though some products will no doubt have to be adapted to the European market, so that might not happen immediately). Will be curious to see how much they paid for it. Glad it's only cash, as even after the recent run-up in price, the shares are still quite undervalued IMO. Link to comment Share on other sites More sharing options...
alpha231616967560 Posted August 15, 2012 Share Posted August 15, 2012 I like that they don't use investment bankers in most of these acquisitions. That has been a consistent characteristic of several of the last few acquisitions. I also like that Robin Raina pointed out the high recurring revenue stream (70%) and low customer attrition. So they are keeping acquisition standards high. Link to comment Share on other sites More sharing options...
Liberty Posted August 15, 2012 Author Share Posted August 15, 2012 Here's TriSystems' website: http://www.trisystemssoftware.com/ More on the ACORD standard: http://www.acord.org/about/Pages/default.aspx Link to comment Share on other sites More sharing options...
mankap Posted August 15, 2012 Share Posted August 15, 2012 I think Trisystem is a small company.Linked shows <50 employees.Probably Ebix is not paying a big dollar amount for the purchase. EBix had 26m cash on hand as per last qtr report.Probably it is all paid from cash at hand. Link to comment Share on other sites More sharing options...
mankap Posted August 21, 2012 Share Posted August 21, 2012 There is a updated investor presentation on Ebix site. It gives the names of Ebix's customers and market share. I think it is explaining the exchange process in much better way than the previous versions. http://www.ebix.com/pdf/Ebix%20Investor%20Presentation%20Roadshow.pdf Link to comment Share on other sites More sharing options...
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