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Ebix's Expanded Stock Buyback Authorization Could be a Catalyst for Share Price Appreciation

|Includes: Ebix Inc (EBIX)

There are few better catalysts for stock price appreciation than expanded share buybacks. Coupled with Ebix's excellent growth, its board's authorization of a tripling of the authorized buyback amount from $5 million to $15 million could be an excellent catalyst. (

It's great to see management teams and company boards that put their money where their mouth is when it comes to an undervalued stock. It has been clear that Ebix management has seen their stock as undervalued for some time now, and an expanded buyback authorization is yet more tangible evidence of a commitment to increasing shareholder value.

In addition, the buyback may create upward pressure on the stock as shorts simultaneously have received a blow to their thesis, and buying pressure increases the share price.

All management behavior is a form of signaling. The increased buyback authorization signals shrewd management and perhaps (just perhaps) a willingness to increase buyback authorizations in the future.

Disclosure: Long Ebix