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Ebix Inc. Message Board

  • stock_animal stock_animal Jun 20, 2013 3:37 PM Flag

    Prediction From March 27

    If intangible assets and goodwill are removed from the balance sheet, EBIX net tangible assets (NTA)/share is negative 32 cents. Cash flow is trending down. Cash flow/share and NTA/share are two important checks to understand how strong the books are. It is hard to fake these in the books. Since I was once defrauded in a stock swindle, I always check these first before looking at anything else. It is not too hard to cook the books and cover it by claiming high goodwill and intangible assets.

    When researching a stock, check the increase or decrease in cash flow per share over a period of years. If cash flow is generally insufficient to cover dividends and EPS then be suspicious. Also, check NTA/share. Book value can be faked by claiming high intangible assets and goodwill. In my research, I always discount all goodwill and intangible assets. If these are checked and look okay, then you can further research the stock. I am doing much better in my stock trading since I have started doing these simple checks. I follow the stocks that fail my initial research to validate my opinion. L

    Sentiment: Strong Sell

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