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Ebix: Niche Business With Outstanding Value Proposition

Nov. 20, 2017 7:01 AM ETEbix, Inc. (EBIX)9 Comments
John Bay, CFA profile picture
John Bay, CFA


  • A GARP stock with global tailwinds and a long runway.
  • Tethered to several of the strongest emerging markets.
  • Secular growth story with reasonable valuation.

Ebix Inc. (Nasdaq: NASDAQ:EBIX)

(Data from Yahoo Finance)

Date of Report




Current Price


Cash per share


Piotroski F-Score


TTM Sales (MM)


TTM Earnings

$98.56 MM

Book Value/ shr in MRQ


Price/ CF


Market Capitalization (MM)


Current P/E


Price/Book Value


Operating Margin




Business Description:

"Ebix, Inc. [EBIX] is a supplier of software and e-commerce solutions to the insurance industry. Ebix provides application software products for the insurance industry, including carrier systems, agency systems and exchanges, as well as custom software development. Ebix conducts its operations through four channels, which include Exchanges, Carrier Systems, Broker Systems and Risk Compliance Solutions (RCS). Ebix operates data exchanges in the areas of life insurance, annuities, employee health benefits, risk management, workers compensation, and property and casualty (P&C) insurance. Ebix designs and deploys back-end systems for P&C insurance brokers across the world. EBIX also designs and deploys on-demand and back-end systems for P&C insurance companies. Ebix focus in RCS channel pertains to business process outsourcing services that include providing project management, time and material consulting to clients across the world, and claims adjudication/settlement services." - Google Finance

Investment Thesis:

Unique Business Model Creates Wide Moat - EBIX's core business is building websites and e-commerce solutions for the insurance industry. The number of different types of insurance products that they service speaks to the depth of their experience and the difficulty of replicating their business model. Operating Life, P&C, Annuity, and Employee Health Benefits (not to mention Worker's Comp) are all very different types of insurance products, and the fact that their portfolio is diversified creates a difficult situation for any competitor attempting to copy their business model. In the history of P&L shown below, it's striking to notice the general resiliency of their margins as they

This article was written by

John Bay, CFA profile picture
John is a recent MBA graduate of UCLA Anderson, and a CFA Charter holder. He has 5 years of experience in the investment management industry. During his time at UCLA, he was accepted into the Student Investment Fund through a highly competitive selection process, and was one of five portfolio managers on the value equities team. During their one year of stewardship of the fund, the value equities sleeve outperformed its benchmark by 1800 basis points. He also worked on the fixed income team, which outperformed by 150 bps. Overall, the Student Investment Fund outperformed by over 300 basis points.

Analyst’s Disclosure: I am/we are long EBIX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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