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Strategies & Market Trends : Fundamental Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: bruwin who wrote (1206)	5/28/2010 8:54:42 AM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 4719

I don't have clear reasons for EBIX being shorted, but here are couple possibilities: - It was richly valued for a bit. - It has had high growth accounting for rich valuation. If people believe (know?) that this growth will end, they would expect valuation to drop. - It sells products to insurance companies. Insurance area was one of the places of 2008 crash, so EBIX might be assumed to be "easy to crash" by association. Alternatively, with insurance companies not doing well, people may assume that they will pay EBIX less. - Its net tangible assets is negative. Not a big deal, but not great either. - Its current ratio has been low. Again, IMHO, this is not a big deal, I personally don't use this metric, but others contend that it is important. It was really due to the fact that EBIX held its debt as a current liability (credit line?) instead of long-term liability (bonds, etc.). Other than that, maybe they know something. Maybe they don't. :)