Jeff-thanks for updating the good news about the decrease number of short shares. I think EBIX will shrug off the Brexit decline today within a month or less. Good price for accumulating additional shares. Yesterday the Dow was up 300 shares and today down 600. So really, it went down 300 pts from Wed, but all the naysayers are running around like chicken-little saying the sky is falling. There may be some fallout early next week, but I think we'll see some 200+ days in the DOW towards the end of the week.
Sentiment: Strong Buy
a decline of well over a million shares from 7,675,705 shares on May 31. To recap, Ebix short interest had been on a long, gradual decline since September of 2015. In this time it decreased from over 10 million shares to 6,404,709 shares on May 13. Then between May 13 and May 31 it suddenly increased by well over a million to 7,675,705 shares, which was very surprising. Now we learn that between May 31 and June 15 it declined by over a million shares and now we are back near the low for the year.
I don't think any thing is certain except for the fact we are staring real uncertainty in the eyes. And while it's a cliche, it's really the one true constant I've seen in the market the past few decades I've been investing - whenever there's uncertainty, the indexes fall. Think about it ... in the last 18 hours not one thing has really changed, except for the fact people feel less certain about what next month will bring. And as long as there's uncertainty (and hiccups down the road in this transition), overall stock prices will decline.
As for Brexit ... what will really #$%$ the markets is if Italy and France and Spain all get referendums in front of their voters. If that happens, the EU as we know it is toast. Leading to more uncertainty....
Purchase low, hold long, sell high. Seems like a good time to accumulate additional shares. With GB exiting the EU, there may be some short-term uncertainty in the market, but I don't think since EBIX is going live with the PPL next month there will be a big drop off in the PPS. The Sterling Pound is down to something like $1.13, but I think much of this decrease is hysteria related and will rebound within a shorter period of time than the economists and politicians prognosticate. The sky is not going to fall due to GB leaving the EU. Interestingly, Spain and Italy may reevaluating their role in the EU.
I'm not an economist (although I've taken two college econ classes while staying at a Holiday Inn) or politician (never saw any value in taking a poli sci class) so I'd like the more august posters to continue giving their knowledgeable thoughts on GB leaving the EU, world markets and outlooks.
I sure wish RR would be able to comment on the matter. It would be great to hear what he thinks of the matter.
Sentiment: Strong Buy
Not in my wheelhouse either, but, some of the standing contracts must be somewhat open ended on future pricing, as the invention process continues, and these newer products and services are subsequently offered as extensions of contracts in place, with adapted and appropriate margins. EBIX has plenty of room to move and only so much can possibly be "baked in". Does the Brexit modify the proven competitive edge, ingenue, significant international awards, tight/ discipline/ conservative working model of the team, or substantial long term history? Long term hold for me.
I do not think these numbers are particularly meaningful because I doubt they factor in PPL revenues. PPL revenues are approximately at least 75M over 5 years (not including the additional revenue EBIX will likely make from related work that spawns from the PPL to help certain participants with individual special needs) which I assume will mostly be paid with in English currency which is crashing and thus going to be worth much less in U.S. currency. Consequently, I think the direct negative effect of the BREXIT may be significant for EBIX, but I could be wrong because this is certainly outside my wheelhouse and may not be analyzing this correctly.
Markets have been due for a pull back, Brexit is the news to start the correction. UK will survive and thrive after the exit which will take place over 2 or more years. The main points for leaving the EU are as stated below.
Some of the things British people said they didn't like about the EU, such as high levels of immigration and giving up the ability to run our own affairs.
I am asking myself, what will be an impact on EBIX the latest "Brexit" vote results - UK voted to leave?
Based on the SEC Filings 10-K FY15, the exposure to UK and Europe markets is not so high ($8.4M only):
Year Ended December 31, 2015
United States $205M
Latin America $5.7M
New Zealand $2.1M
I have no idea about the PLL deal influence. Any thought?
Sentiment: Strong Buy
The isupporttom web site has a brief news entry dated June 22 discussing a PPL demo on June 17. Here is the text including the July 11 go live date:
"Last Friday, attendees had the opportunity to view the live system and gain an understanding of how brokers and underwriters can place risks electronically. Thank you to everyone who attended the event and we are looking forward to PPL go-live on 11 July with the roll-out of the terrorism class of business."
PN is trading 15% below takeover price this is really discounted. I think these generally trade in the 5-7% discount range in mergers. It seems like the market doesn't expect this to go thru.
Sentiment: Strong Buy
I agree with you on this being the first quarter without the fade. Every time PR announced news the fade reversed and we marched higher.
Yes, waiting is what you do when you invest because this is not gambling where you get instant gratification. Profits from investing takes time and usually months to years to materialize. Contrary to your bald assertion, the record and evidence indicates that my comments here and direct communications with representatives of EBIX management have done enormous good. As a direct and proximate result of my comments here, management reached out to me (and not you) and asked to talk to me about my concerns about EBIX PR/IR. Since this discussion, EBIX has done things to directly address my concerns where they have attended for the first time in many years an investment conference and now regularly issue press releases on all kinds of topics that they never did before, like winning awards and updating the market on contract implementation. Consequently, this quarter, unlike many quarters before, PPS has held near its high and not slowly faded down to erase all gains achieved during the quarter like it has in prior quarters. You cannot challenge actual facts which my comment here contains and which yours completely lacks.
I guess by now you have learned that your posts have not done any good. Still waiting for the last pop you have forecast.
Food for thought: I can see both sides having reason for adjustment considerations, possibly. Closing price for PN today, 6/21/16, was $8.60, and despite possible prospective value, I don't see it necessarily trading a lot higher in near term as the acquisition may not go through. I am concerned that the Patriot Nat. trailing PE for last 4 qtrs. reported, is listed at 78.5, compared to it's industry, multiline insurance avg. @ 24.6. Objective history, not much to debate, and forward estimates are surely worthy of consideration, all IMO. Same period trailing PE for EBIX is listed @ 19.5 while industry , software is 51.4. It may or may not be a critical inheritance factor , but those broad discrepancies , for me, hint at a flavor of a conservatism we enjoy in the EBIX inventive,diversification strategy.
Another PPL snippet from Insurance Insider yesterday:
Next PPL rollout classes revealed
20 June 2016
London market electronic trading system Placing Platform Limited (PPL) has chosen directors' and officers', errors and omissions and financial institutions business as the next classes in which to roll out its technology, The Insurance Insider can reveal.
As previously reported, PPL has been first trialling the service in the terrorism class of business.
Last week (16 June), PPL managing director Susan Jakobek announced to CEOs in the London market that the three professional indemnity classes of business would follow the...
Sentiment: Strong Buy
I agree - I think there's room for adjustment, just enough for me to be interested plus the current trade gap. Just as important, I like the price of PN at 8.6. It will crash if the bid falls, but over the long haul I would be ok with holding PN. I understand this space very well because of Ebix. Not to mention that it is at 1x revenue compared to its current market, as a small cap, with a lot of upside over the long haul. As Buffett says, focus on your circle of competence!
I do not see much flexibility on EBIX's end. RR has made it very clear that he will stick to a very disciplined approach to acquisitions where he won't over pay and will require certain metrics in terms of margins and accreditive to earnings. I do think RR will up EBIX's bid a bit for PN, but not by much and will not hesitate to walk away if PN asks for too much.