EBIX - Ebix Inc

[estoybien]

Now at 9. Was at 22 just two weeks ago. Seems like at 9, it's a buy. At $9, it's mkt cap is 0.5x rev and ~3x earnings. Regardless of how bad 2020 is due to coronavirus, esp in its India businesses, and taking debt into account, I see value here. Building up a long position slowly as it keeps going down, maybe buying some far-off calls. Anyone else have opinions here?

[estoybien]

Quite a roller coaster this stock is.

Anyone have thoughts on Ebix-Yatra spat, info re the complaint filed by Yatra in DE?

 

[estoybien]

If you're a shareholder, vote AGAINST re-electing the Ebix Board of Directors.

 

They've allowed the CEO to destroy $2bil of shareholder value by pursuing vanity projects lading the company with debt.

 

CalPERS has already announced it's voting its 60k shares against the board.

Joel Tillinghast of Fidelity capital called into the Q1 conference call, which is a pretty rare thing. Hopefully he votes Fidelity's huge number of shares against the Board.

 

There's even a shareholder site championing the cause, RemoveTheEbixBoardOfDirectors.com

[estoybien]

EBIX has had a nice run-up after its Nov 9 earnings release showed a much healthier company than was being painted by short sellers. Short thesis was that India business would fail and the debt from acquisitions would push EBIX into bankruptcy. India business weighs, esp from COVID, but revenues were higher than same quarter 2019 and it's clear that EBIX is far from falling off any cliffs. India travel/forex/remittances will recover from COVID. Looking forward to seeing what comes of BSE/Ebix JV, Routier, Miles, etc. US ins exch business projected to grow high single digits. Cash flow still strong, balance sheet has substantial debt but manageable given steady stream of cash and well within covenants. Short interest was around 25%, so covering will take a while, but it is definitely beginning.

 

One big news item of interest is Lloyd's is no longer going to build and own the next-generation electronic placing platform for the London insurance marketplace. The current generation PPL is built and run by EBIX. The current contract runs out in 2021, but Lloyd's decision suggests a possibility that EBIX stays involved beyond then. In any case, for 2021, Ebix CEO suggested UK revs increasing next year by 20%; this is likely due to PPL.

 

Would like to hear other people's thoughts on this. There's a lot to unpack in the business, and it's a bit of a black box, but still potential here, especially if it pulls back substantially below 30. Fiscal year ends Dec 31, year-end reporting is in early March. I'm long and also have some March calls.

 

Lawsuit by Yatra an issue to be aware of.