Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Ebix is one of them. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise.
The insurance industry is a big business, and it requires a lot of moving parts to keep insurance companies working smoothly. Ebix does its part to help with its data exchanges, broker systems, and back-office support for insurance operations. Let's take an early look at what's been happening with Ebix over the past quarter and what we're likely to see in its report on Thursday.
Stats on Ebix
Analyst EPS Estimate
Change From Year-Ago EPS
Change From Year-Ago Revenue
Earnings Beats in Past 4 Quarters
Source: Yahoo! Finance.
Will Ebix keep rising higher this quarter?
Analysts have been cautiously optimistic about Ebix's prospects lately, having pushed estimates up $0.01 per share for the just-ended quarter and by $0.02 per share for full-year 2013. But the stock hasn't shared that enthusiasm, falling about 2% since early December.
Ebix stands on the brink of a huge opportunity. With Obamacare changing the health-insurance landscape, Ebix could benefit as insurance companies seek to take full advantage of millions of new customers seeking mandated coverage. As insurers try to ramp up their offerings, they'll need to rely on outside insurance services to an even greater extent, opening up more growth opportunities for Ebix. That potential may be behind Ebix's decision to reward shareholders with a 50% dividend boost in February.
Ebix also has an impressive stable of customers. Genworth Financial in particular has soared recently due to a recovery in its mortgage-insurance business. With even more extensive networks of agents, brokers, and customers, Manulife Financial and Prudential both count on Ebix to help keep communications streamlined and policyholders satisfied.
Last month, Ebix took a big hit when a report from Gotham City Research attacked the stock. Ebix has managed to survive previous attacks from other research firms, but if Gotham's allegations about failing to disclose related-party loans and alleged unreliable and inaccurate accounting are true, then Gotham's contention that the shares are worth only a third of their current value may be more than just a short-seller talking up its book. Still, Ebix defended itself less than a week later, and shares recovered much of their losses.
In its quarterly report, watch Ebix closely to see if the Gotham City allegations distract it from the much more important task of coming up with strategies to defend itself from potential competitors. In a growing business, Ebix needs to establish itself as the go-to player in order to get maximum growth.
The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report, "3 Stocks That Will Help You Retire Rich," names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.
Click here to add Ebix to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
The article Ebix Earnings: An Early Look originally appeared on Fool.com.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Ebix. The Motley Fool owns shares of Ebix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.