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ITT Educational Services Inc. Message Board

fife14 3 posts  |  Last Activity: Nov 7, 2014 9:10 AM Member since: Jan 23, 1998
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  • Not clear how recent acquisition will affect operating margins moving into next year, but assuming they stay the same, net income should be 75 million based upon 250 million in revenues. If they move down 3% to 35%, then net income should still be 70 million. On a per share basis, it results in EPS est. for 2015 between 1.89-2.02 (based upon 37 million shares). This EPS range could be higher as more shares are retired. Even if you take conservative assumptions and assume EPS around $1.80 for 2015, that still represents a PE of 8.3x on today's prices. PE for a slow (organic) growth company like Ebix with high profitability/recurring revenue metrics should at least trade for 13x earnings, so we should see the mid 20's at some point next year.

    Sentiment: Buy

  • Reply to

    settlement is the solution

    by fife14 Oct 30, 2014 2:15 PM
    fife14 fife14 Oct 30, 2014 4:09 PM Flag

    Your right. I'm just frustrated by the fact that this investigation is the primary reason the stock is trading at such a low valuation and yet for more than a year, there is silence. Does it take this long to bring the burden of proof to the table? If there is no burden of proof, close the case and move on.

    Sentiment: Buy

  • The biggest obstacle to gaining institutional interest is having an ongoing investigation that is hanging over the company. No matter how many conferences you appear in, EBIX stock price will not get serious traction until these investigations have been put to bed, so I am inclined to believe that settlement without admitting or denying any wrong-doing is the best path forward for shareholders. Couple a settlement with better momentum in earnings and you have the ingredients for a huge move higher.

    Sentiment: Buy

ESI
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