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UniTek Global Services, Inc. Message Board

propitiousaugury 38 posts  |  Last Activity: Aug 8, 2014 10:22 PM Member since: Mar 20, 2013
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  • by propitiousaugury Jun 6, 2014 5:53 PM Flag

    I'll spare you the usual "Gotham is exaggerating the claims," but will share my thoughts regarding the company for those who are truly the long term holders.

    See it's really simple. EBIX is an IT company that operates insurance exchanges and provides other ancillary services. Are the revenues real? Are the clients real? Are the services valuable? Is the cash on balance sheet, real? You don't need a short-seller to tell you that - you can find that out yourself by reading the filings, presentations, their conference calls, looking at their website and sleuthing around the web. You can add the numbers from the filings - the cash intake from share issuance and debt and cash outflow due to dividends, buybacks and acquisitions, and form your own conclusion. Anything tangential shouldn't matter 3-5 years from now. But guess what? Almost NO ONE cares about what happens 3 or 5 years from now and that's exactly why the opportunity exists. All everyone wants is to get rich quick.

    All the drivel about outstanding taxes, etc makes for a profitable hit-and-run smear job, nothing more. Either Raina is a #$%$ or he isn't. There isn't any need for long spreadsheets or 10 page thesis or splitting hairs. By looking at his stake, his track record, his public statements and his actions. And based on your own conclusion, you should either buy shares in EBIX (at a price and of a size that makes you feel comfortable) or stay the hell away.

    Some timeless advice:

    "To become really wealthy, you must be able to determine when the market is overestimating a risk and when it is underestimating it. This is to say that you must be able to learn to no longer care what Wall Street thinks, what the business section thinks, what your fellow investors think. You must be able to stomach days when your stocks drop 20%, because you know you're right. You must learn to live with people telling you what you're doing is "extremely risky" when you know that the risk is overstated.

  • Reply to

    I Like OUTR here

    by sean_erickson2000 Jul 9, 2014 4:49 PM propitiousaugury Jul 9, 2014 7:53 PM Flag

    I thought I was the only one crazy enough to buy here. Amid all the cacophony about a weak Q2 or the imminent demise of DVDs...I ask you - what alternative do redbox customers have of renting new movies for $1.2-$1.5 ?

    Wake me up when iTunes/Amazon start renting latest movies for $1/movie. Or when Netflix can have all the latest titles for $8/month.

  • propitiousaugury Aug 7, 2014 9:49 PM Flag

    I don't understand why you keep comparing it to blockbuster. Redbox does NOT have fixed costs like Blockbuster - no stores, no employees to staff each store, etc. Redbox has a lean operating model that can be scaled down to accommodate any declines without imploding. There's no competition and the masses don't have a meaningful alternative that provides them with cheap movies at the 1.2-1.5 per night.

    Any other concerns?

  • Reply to

    Keeping it Real

    by da8265 Jun 8, 2014 11:47 AM propitiousaugury Jun 10, 2014 2:45 AM Flag

    I really don't care about the "manipulation" to be honest. It's amusing for me, and (I'm sure) wildly profitable for the short seller. It creates headlines, drives share volatility, generates commissions for the brokers and causes a bunch of brouhaha. That's about it..

    Ask yourself - does a single client of EBIX care about Gotham City Research tweets about? or what the the market (in its infinite wisdom) think on a particular day about EBIX's stock price? I think not!

    What they want is a stable company that can provide good service at reasonable prices. And EBIX has done so. And it continues to do so, as far as I can tell. Everyone realizes (except the market) that fines will be paid, lawsuits will be settled, investigations will be conducted...and in the end...everyone will move on....

    Now regarding the volatility - it's sure dumbfounding how EBIX can be valued at $17/share just a couple of months ago and how it can be valued right now at $12.75. And for those nervous shareholders that are first to rush to the exits when they smell a short seller - why do they keep coming back? Aren't they injured enough? Aren't they disgusted by EBIX already? I'd think those that were fed-up with EBIX would've moved on already...but they keep coming back!

    What can I say...I pray for volatility as it blesses me with opportunities. I loved it last time when EBIX went to single digit per share so here's to hoping it does so again, so I can buy even more than I bought last time! In the meanwhile, I will keep collecting those fat premiums by selling puts to panicked's like selling apocalypse insurance to doomsdayers...

  • propitiousaugury Jul 30, 2014 3:48 PM Flag

    @dvds_are_dead: I really want to know - how much do you think is the company - Outerwall - worth? Surely a cash generating entity cannot be worthless, right? I honestly want to know how much you think it's worth.


  • Reply to

    Keeping it Real

    by da8265 Jun 8, 2014 11:47 AM propitiousaugury Jun 8, 2014 8:05 PM Flag

    "So is this really a good investment?"

    Wait - stop right there. Whether it's a good investment or a terrible investment is, for the most part, a function of price. So EBIX at one price is a great investment, and terrible at another. Yes we are all talking about the same underlying asset, but if I paid 5-7x earnings multiple, and earnings are (for the most part) stable - then I'm a happy camper.

    This, IMO, is what most people fail to see. They think "OH EBIX will go nowhere with those flat revenues/earnings so it belongs in the trash can" is precisely why I'm able to buy EBIX on the cheap. Ask yourself if you're happy owning a business like EBIX that has a free cash flow yield of 12% yield. If not, what free cash flow yield would you require?

    A lot of people get anchored to a specific price (anchoring bias) or assume that past will resemble the future (recency bias). Try to avoid those and think in an absolute sense - at what price would you buy (if any) ?

  • Reply to

    OK, what is today all about?

    by soooverylucky Jun 4, 2014 10:36 AM propitiousaugury Jun 4, 2014 12:40 PM Flag

    I'm loving the volatility here! More opportunities for me. I consider volatility my friend as I am in no need of funds that I invest, in the near future. I am happy to take a lumpy 15-20% annualized return instead of a flat 7-10%

  • Reply to

    Any Word on Pickup of WilPhoenix July-Oct?

    by roboklerk Jun 18, 2014 9:55 AM propitiousaugury Jun 19, 2014 3:51 PM Flag

    No word yet, but you can always email IR. Their IR is very responsive.

  • Reply to

    OK, what is today all about?

    by soooverylucky Jun 4, 2014 10:36 AM propitiousaugury Jun 4, 2014 12:21 PM Flag

    LOL this is pretty funny. I bet even Raina is scratching his head thinking "what the hell is going on to this stock? Even I can't explain!"

    Anyway just another day for Mr. Market, folks! Every time I buy on weakness/fear when there's no news to justify it, I do well and this is just another opportunity. Considering writing some puts. Any suggestions here? :D

  • Reply to

    EBIX Valuation

    by srmedava Jul 15, 2014 12:34 PM propitiousaugury Jul 15, 2014 12:52 PM Flag

    Thanks for this. The speculator in me wants to attribute the latest weakness in EBIX to Danny Yu's successful hit on GOWEX. So long as the investigations remain open and so long as we refuse to see meaningful buyback or top-line growth, the cloud will hang over EBIX which will be symbolized by a discount to the "fair valuation."

    As for me, I'm in a wait & see mode.

  • propitiousaugury Jul 29, 2014 8:17 PM Flag

    Redbox instant was never a huge part of Outerwall to begin with. Sure $65M would've been better spent...but at this point it's water under the bridge. I'm happy to buy OUTR on the cheap on the demise of Redbox Instant.

    Core redbox biz was still minting money, last time I checked. Sustainability of that cash flow is all that matters to me.

  • Reply to

    Put options expiring today

    by discinboy Jul 18, 2014 10:15 AM propitiousaugury Jul 18, 2014 6:31 PM Flag

    Same here. The $10 strike puts I wrote, expired today and I made about 5% on my total capital (the amount I would have to pay if I were assigned the shares) - in the span of 45 days.

  • propitiousaugury Jul 25, 2014 4:25 PM Flag

    Overall revenues are much more important than SKS (Sales Kiosk Sales). If you increase the number of kiosks at a single location (say at a crowded location like a walmart supercenter), the SKS will go down the overall revenue will go up.

    Don't forget they can bump up the price per DVD rental from $1.2 to $1.3-$1.4-$1.5

    Last time they raised prices, revenue experienced a pretty good jump as people don't mind paying extra 10 or 20 cents per day to rent the movie.

  • Reply to

    Robin Raina is a disaster

    by robhchndro Jul 13, 2014 12:18 PM propitiousaugury Jul 15, 2014 12:40 PM Flag

    I know it hurts the longs to see the price drop back to $12 but such is the way markets work. There's a time when a stock trades at an amazing price for the buyer, there's time when a stock trades at an amazing price for the seller, and then there's a boring price where it's best for either sides to do nothing. I suspect we would be seeing fewer complaints if the stock was trading at 17/share. Especially frustrating is the fact the longs have endured one heck of a roller coaster ride (voting no against the merger, seeing a 60% drop on investigation, slow recovery, then a weakness back to $12) and have little to show for it.

    I understand that and I have a certain time frame that I'm allocating to each company I buy. My capital has an opportunity cost and I do understand the frustration. But I'm not looking to change people, I'm just looking to partner with the right people without changing them. So far, I haven't seen anything truly worrisome from Ebix/Raina but neither have I seen anything amazing come out of EBIX post the investigation revelation. So I'm content on sitting tight for another year or two and seeing if something materializes. If not, I'll just take my lumps and move on.

    Sentiment: Hold

  • propitiousaugury Aug 8, 2014 3:41 PM Flag

    What do you mean they did not scale down enough last quarter? They have more data/facts/metrics for each kiosk that they reveal in filings so I don't feel comfortable second guessing them on that. They have said they will downsize and continue to optimize their remaining kiosks.

    Yeah the guidance was lowered - primarily because they raised an additional amount of money which increased interest costs. But still doesn't change the fact that it's ridiculously cheap at these levels (even assuming ecoATM is a dud). Netflix isn't really a good comp because there are ZERO recent/fresh titles there. A better comp is Amazon and iTunes.

    Speaking of Amazon and iTunes, there was a question on the conference call about that - "do you see VOD pricing going up or down?" and CEO basically said that studios want to maintain fat margins so he sees the pricing going up rather than down.

    Again, cheap on P/FCF basis with a proven business model with pricing power is what makes it attractive for me. Don't get me wrong though - you can make money being short and long and I'm not long because I'm in love with Outerwall, I'm long only because the risk/reward is so damn attractive in being long, as opposed to being short.

    Good luck!

  • Reply to

    after hours???

    by shanti.ashwin Aug 7, 2014 5:44 PM propitiousaugury Aug 7, 2014 6:09 PM Flag

    lol just 1 share.

  • propitiousaugury Aug 6, 2014 2:23 PM Flag

    Great news! Excellent validation for the long-thesis. Increased my position today.

  • Reply to

    OK, what is today all about?

    by soooverylucky Jun 4, 2014 10:36 AM propitiousaugury Jun 4, 2014 12:44 PM Flag

    Seriously though - this stock isn't for everyone. One can only buy this stock if he/she can stomach the volatility. This isn't a blue chip like JNJ or K or BRK.

  • Reply to

    June 20, 2014 Dividend

    by robbijohnson Jun 21, 2014 11:16 AM propitiousaugury Jun 21, 2014 7:47 PM Flag

    Is this via Wells Fargo?

  • propitiousaugury Jun 3, 2014 4:39 PM Flag

    Well just create a new ID on yahoo and post :) Internet offers great option to post anonymously - the least you could do is protect your identity so whatever you post doesn't come back to bite you.

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