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It was with great pleasure that I paid my taxes this year. Why?? I’ll tell you why:
1. Since I paid taxes, that means I made money.
2. Bam is gonna make me pay more taxes next year so I am glad I made my money this year.
I want to make more money though. I want to make money faster. The easiest thing to do is pick stocks that go up and up.
Now some stocks have sexy names like Google, Starbucks and Walmart. There are some companies that make tons of money but the name of the company is somewhat peculiar. One such company is Ebix Inc. A most peculiar name indeed. However all they do is make money. So I’m in.
Today I bought EBIX at 25.15. I will sell it in 4 – 6 weeks at 29.02. Here is why I like EBIX:
Now if you look at the chart, you will make the conclusion that this stock does not look at all like a $$$MR. MARKET$$$ stock. However, these are extraordinary times and there aren’t many stocks that have climbed consistently for 52 weeks. However this chart does show some near term strength.
I am highly confident. Why? I’ll tell you why.
What the heck is an EBIX anyway? Ebix is an insurance services player that provides four different services in the worldwide insurance markets – one, B2B Exchanges; two, Insurance Company Backend Systems; three, Broker Systems and lastly, four, BPO Insurance Services to insurance companies, brokers, large corporate, etc.
Ebix’s goal is to be the leading back-end powerhouse of insurance transaction in the world. The company’s technology vision is to focus on convergence of all insurance channels, processes and entities in a manner that data can seamlessly flow, once a data entry has been made. They intend to do that by designing products and services that are pioneering and are at least a few years ahead of their competition.
Now that is a lofty goal indeed…but the scary thing is..they are doing it! Ebix has emerged as a market leader in some of the most important segments of the $60 billion insurance IT market itself, with the global insurance markets being a lot bigger. EBIX has no competitors. Zero. Nada. Zip. Shutout. Love. EBIX has built an outstanding reputation among a large, impressive customer base. Game Over!
Now, what is this product? It is an end-to-end system for an insurance company. Anything they need to run their business internally. Again, everything an insurance company system has, this has. It is a very complicated system. Again policy processing, claims administration, sales management, underwriting, rating, general administration, general ledger, reinsurance, you name it.
EBIX has a recurring revenue base of 70%. That means every year…kaching kaching ka-CHING! It’s vast customer base included hundreds of carriers and more than 300,000 brokers in addition to a few hundred corporate clients.
Sure this is a lot of talk but what does it mean when it comes to coin? Look at the revenue growth in the last 4 years:
2005 - $24 MM
2006 - $29 MM
2007 - $43 MM
2008 - $75 MM
Wow… Each of the last few years has been a record year for Ebix, in terms of beating all its results in the last 33 years. This year was no different from the last few to the extent that the financial results for the year 2008 are record results again – the best ever in their 33 year young history.
If you think this is impressive, the net margins have grown from 11% to 37% so this of course translates to profits. Yup..big EPS profits:
2005 - $0.52/share
2006 - $0.72/share
2007 - $1.20 / share
2008 - $2.28 / share
Ebix's 2008 fourth quarter revenue rose 65% to $20.14 million, compared to $12.2 million during the fourth quarter of 2007. Q4 ‘08 net income rose 76% to $7.91 million, or $0.66 per diluted share, versus Q4 ’07 net income of $4.5 million, or $0.40 per diluted share. Results for Q4 2008 and Q4 2007 were based on 12.29 million and 11.33 million weighted average diluted shares outstanding respectively.
Ebix diluted EPS for 2008 grew 90% year over year to $2.28, 218 % as compared to 2006, and 341% as compared to 2005. If you looked at the year 2008 itself, each sequential quarter was an improvement over the previous quarter in the year.
This generates a ridiculous Return on Equity of 42%.
With this kind of earnings and revenue growth you would think that EBIX would be pretty expensive, eh? Wrong wrong wrong. EBIX has a bargain basement PE of only 10.9. Why is this so cheap? I guess maybe people sold off EBIX because they were afraid of what those thieves at AIG did. But EBIX is not an insurance company. They sell software and services to the entire insurance industry. The only way that EBIX goes away is if the entire insurance industry goes away. That ain’t gonna happen…at least not until EBIX hits 29.02. All of EBIX’s products are cutting edge and based on e-commerce technologies. EBIX has a 99%+ customer retention rate over the last 8 years.
The revenue in 2008 was split across the four channels that they focus on. The largest percentage was in the area of Exchanges with a 57% share, broker channel had 19%, carrier channel had 12%, and the BPO channel had 11% of our 2008 revenues. In the year 2008, US accounted for 65% of the revenues, while international accounted for 35% of the revenues.
Ebix today is a complete end-to-end insurance services player. They believe that efficiencies in insurance can truly happen if a transaction can be electronically carried from one end to another with just one data entry. To do that, one has to drive paper out of the process and converge all the systems that power insurance transactions across all entities – be it brokers, carriers, distributors, corporates or consumers. That is precisely what Ebix is set out to do. Today the need and complexity for this can be best expressed by the fact that outside Ebix, there is no one single entity that can boast of having tried to do this worldwide. That is a challenge and an opportunity by itself
There are three kinds of companies today across the world; companies that sell products, companies that sell services and companies that sell infrastructure services. With each passing day, Ebix is becoming an infrastructure company.
Ask the question…would you like Ebix to be an airline or would you like Ebix to be an airport? And the reason for that question was, you could choose, when you are flying out anywhere, you could choose which airline to fly by; but you really don't get to choose an airport, most of the times, the choice of the airport is a given. Ebix’s goal was and is to be the airport, rather than the airline and that is why a lot of their business now is exchanges or infrastructure business.
What's Ebix's mission, what is Ebix trying to do? Ebix's goal is to be an insurance powerhouse of transaction. They want to be like a Cisco of the insurance industry, which means they don't really care about whether their name is in the front or not. As long as they are powering transactions, be it transactions on the insurance company side, be it on the broker side, be it at an exchange, or in any form or fashion across the world, then EBIX makes money.
But don’t take it from me. Here’s what Mr. Ebix had to say about their most recent report. Ebix President and Chief Executive Officer Robin Raina, commented, “We are pleased with these results as they reflect the continued success of the company in 2008. We look at these results as a step forward towards establishing Ebix as the dominant infrastructure exchange services player in the global insurance markets.”
Raina said, “The Q4 2008 results are record results in terms of both revenue and net income. The diluted EPS of $0.66 for Q4 2008 translates to a pre-split diluted EPS of $1.98, which is again a record for the company. We are quite pleased that we have been able to grow our net margins to 39% in Q4 of 2008.”
“The year 2008 has seen Ebix become more of an infrastructure player rather than a services player with our exchange business growing to 59% of our world-wide revenues. We became the largest insurance certificate origination and tracking player in the United States. We successfully have entered new markets like employee benefits and health claims,” Raina added. “As I said last year, while these results have established a new benchmark in terms of revenue, income and earnings, we believe that our best is yet to come.”
Raina concluded, “We believe that the present economic time serves as an opportunity to make some symbiotic accretive acquisitions at the right costs. We continue to generate strong cash flows and believe that we can put that cash to good use by reducing our debt and also making some sensible acquisitions.”
Me likey.
Let me know what you think of this write up. I am HUGE! Bring me your finest meats and cheeses. If you buy this stock and make money on it, please remember the Little Tigers: www.golittletigers.com
$$$MR. MARKET$$$
www.mrmarketishuge.com
1. Since I paid taxes, that means I made money.
2. Bam is gonna make me pay more taxes next year so I am glad I made my money this year.
I want to make more money though. I want to make money faster. The easiest thing to do is pick stocks that go up and up.
Now some stocks have sexy names like Google, Starbucks and Walmart. There are some companies that make tons of money but the name of the company is somewhat peculiar. One such company is Ebix Inc. A most peculiar name indeed. However all they do is make money. So I’m in.
Today I bought EBIX at 25.15. I will sell it in 4 – 6 weeks at 29.02. Here is why I like EBIX:
Now if you look at the chart, you will make the conclusion that this stock does not look at all like a $$$MR. MARKET$$$ stock. However, these are extraordinary times and there aren’t many stocks that have climbed consistently for 52 weeks. However this chart does show some near term strength.
I am highly confident. Why? I’ll tell you why.
What the heck is an EBIX anyway? Ebix is an insurance services player that provides four different services in the worldwide insurance markets – one, B2B Exchanges; two, Insurance Company Backend Systems; three, Broker Systems and lastly, four, BPO Insurance Services to insurance companies, brokers, large corporate, etc.
Ebix’s goal is to be the leading back-end powerhouse of insurance transaction in the world. The company’s technology vision is to focus on convergence of all insurance channels, processes and entities in a manner that data can seamlessly flow, once a data entry has been made. They intend to do that by designing products and services that are pioneering and are at least a few years ahead of their competition.
Now that is a lofty goal indeed…but the scary thing is..they are doing it! Ebix has emerged as a market leader in some of the most important segments of the $60 billion insurance IT market itself, with the global insurance markets being a lot bigger. EBIX has no competitors. Zero. Nada. Zip. Shutout. Love. EBIX has built an outstanding reputation among a large, impressive customer base. Game Over!
Now, what is this product? It is an end-to-end system for an insurance company. Anything they need to run their business internally. Again, everything an insurance company system has, this has. It is a very complicated system. Again policy processing, claims administration, sales management, underwriting, rating, general administration, general ledger, reinsurance, you name it.
EBIX has a recurring revenue base of 70%. That means every year…kaching kaching ka-CHING! It’s vast customer base included hundreds of carriers and more than 300,000 brokers in addition to a few hundred corporate clients.
Sure this is a lot of talk but what does it mean when it comes to coin? Look at the revenue growth in the last 4 years:
2005 - $24 MM
2006 - $29 MM
2007 - $43 MM
2008 - $75 MM
Wow… Each of the last few years has been a record year for Ebix, in terms of beating all its results in the last 33 years. This year was no different from the last few to the extent that the financial results for the year 2008 are record results again – the best ever in their 33 year young history.
If you think this is impressive, the net margins have grown from 11% to 37% so this of course translates to profits. Yup..big EPS profits:
2005 - $0.52/share
2006 - $0.72/share
2007 - $1.20 / share
2008 - $2.28 / share
Ebix's 2008 fourth quarter revenue rose 65% to $20.14 million, compared to $12.2 million during the fourth quarter of 2007. Q4 ‘08 net income rose 76% to $7.91 million, or $0.66 per diluted share, versus Q4 ’07 net income of $4.5 million, or $0.40 per diluted share. Results for Q4 2008 and Q4 2007 were based on 12.29 million and 11.33 million weighted average diluted shares outstanding respectively.
Ebix diluted EPS for 2008 grew 90% year over year to $2.28, 218 % as compared to 2006, and 341% as compared to 2005. If you looked at the year 2008 itself, each sequential quarter was an improvement over the previous quarter in the year.
This generates a ridiculous Return on Equity of 42%.
With this kind of earnings and revenue growth you would think that EBIX would be pretty expensive, eh? Wrong wrong wrong. EBIX has a bargain basement PE of only 10.9. Why is this so cheap? I guess maybe people sold off EBIX because they were afraid of what those thieves at AIG did. But EBIX is not an insurance company. They sell software and services to the entire insurance industry. The only way that EBIX goes away is if the entire insurance industry goes away. That ain’t gonna happen…at least not until EBIX hits 29.02. All of EBIX’s products are cutting edge and based on e-commerce technologies. EBIX has a 99%+ customer retention rate over the last 8 years.
The revenue in 2008 was split across the four channels that they focus on. The largest percentage was in the area of Exchanges with a 57% share, broker channel had 19%, carrier channel had 12%, and the BPO channel had 11% of our 2008 revenues. In the year 2008, US accounted for 65% of the revenues, while international accounted for 35% of the revenues.
Ebix today is a complete end-to-end insurance services player. They believe that efficiencies in insurance can truly happen if a transaction can be electronically carried from one end to another with just one data entry. To do that, one has to drive paper out of the process and converge all the systems that power insurance transactions across all entities – be it brokers, carriers, distributors, corporates or consumers. That is precisely what Ebix is set out to do. Today the need and complexity for this can be best expressed by the fact that outside Ebix, there is no one single entity that can boast of having tried to do this worldwide. That is a challenge and an opportunity by itself
There are three kinds of companies today across the world; companies that sell products, companies that sell services and companies that sell infrastructure services. With each passing day, Ebix is becoming an infrastructure company.
Ask the question…would you like Ebix to be an airline or would you like Ebix to be an airport? And the reason for that question was, you could choose, when you are flying out anywhere, you could choose which airline to fly by; but you really don't get to choose an airport, most of the times, the choice of the airport is a given. Ebix’s goal was and is to be the airport, rather than the airline and that is why a lot of their business now is exchanges or infrastructure business.
What's Ebix's mission, what is Ebix trying to do? Ebix's goal is to be an insurance powerhouse of transaction. They want to be like a Cisco of the insurance industry, which means they don't really care about whether their name is in the front or not. As long as they are powering transactions, be it transactions on the insurance company side, be it on the broker side, be it at an exchange, or in any form or fashion across the world, then EBIX makes money.
But don’t take it from me. Here’s what Mr. Ebix had to say about their most recent report. Ebix President and Chief Executive Officer Robin Raina, commented, “We are pleased with these results as they reflect the continued success of the company in 2008. We look at these results as a step forward towards establishing Ebix as the dominant infrastructure exchange services player in the global insurance markets.”
Raina said, “The Q4 2008 results are record results in terms of both revenue and net income. The diluted EPS of $0.66 for Q4 2008 translates to a pre-split diluted EPS of $1.98, which is again a record for the company. We are quite pleased that we have been able to grow our net margins to 39% in Q4 of 2008.”
“The year 2008 has seen Ebix become more of an infrastructure player rather than a services player with our exchange business growing to 59% of our world-wide revenues. We became the largest insurance certificate origination and tracking player in the United States. We successfully have entered new markets like employee benefits and health claims,” Raina added. “As I said last year, while these results have established a new benchmark in terms of revenue, income and earnings, we believe that our best is yet to come.”
Raina concluded, “We believe that the present economic time serves as an opportunity to make some symbiotic accretive acquisitions at the right costs. We continue to generate strong cash flows and believe that we can put that cash to good use by reducing our debt and also making some sensible acquisitions.”
Me likey.
Let me know what you think of this write up. I am HUGE! Bring me your finest meats and cheeses. If you buy this stock and make money on it, please remember the Little Tigers: www.golittletigers.com
$$$MR. MARKET$$$
www.mrmarketishuge.com
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