Why Ebix Is Ready to Bounce Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, insurance-industry software specialist Ebix (NASDAQ: EBIX  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Ebix and see what CAPS investors are saying about the stock right now.

Ebix facts

Headquarters (Founded)

Atlanta (1976)

Market Cap

$611.4 million

Industry

Application software

Trailing-12-Month Revenue

$189.4 million

Management

Chairman/CEO Robert Raina
CFO Robert Kerris

Return on Equity (Average, Past 3 Years)

27.1%

Cash/Debt

$31.0 million / $83.6 million

Dividend Yield

1.3%

Competitors

Applied Systems
BenefitMall
Vertafore

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 97% of the 1,500 members who have rated Ebix believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those bulls, fellow Fool Thomas Engle (TMF1000), succinctly summed up the Ebix bull case for our community:

Their business isn't easy to predict or value due to their growth by acquisition business model. However, I believe, barring real accounting problems, they seem to be growing at a nice pace while keeping their balance sheet OK, reducing shares outstanding, keeping operating margins strong and generating ample cash flow. They are funding acquisitions mostly using cash flow. ...

At the present low price, I feel its worth the risk of not easily being able to follow value creation due to the many acquisitions. By checking cash flow growth, changes in the balance sheet, share reductions, we can get a basic idea that things are running reasonably well. ...

About 80% of their revenue is reoccurring. I like that they are buying small players in the industry, increasing their ability to produce more reoccurring revenue and expanding their markets while improving their technology.

If you want market-thumping returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite its five-star rating, Ebix may not be your top choice.

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  • Report this Comment On February 05, 2013, at 7:17 PM, HighVantage wrote:

    They are going about being a main player in their market... acquisitions are key to expanding and maintaining their awesome growth.

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