Why I Bought Ebix Ahead Of Earnings
- Legal troubles and a short seller attack have created a buying opportunity (the 2011 Class Action lawsuit was settled in June 2014, and accusations of accounting fraud seem unfounded).
- This is a business with a healthy balance sheet in a net cash position and strong free cash flow generation (~40% margins) with 80% recurring revenue streams.
- It has $100+ million available under the repurchase plan, representing >20% of outstanding shares and a larger percentage of free float (the chairman owns 10%).
- There is a potential short squeeze with ~40% short interest.
- It offers a >2% dividend while you wait for EBIX to be fairly valued.
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