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Ebix 4Q19 schedule and reality shifts ?4

20:04 12-Feb-20


Ebix has scheduled its fourth quarter report for the morning of Monday, March 2nd.  Two analysts cover the company and the mid-point of their estimates is 99 cents of EPS from $154M of revenue increasing to $172M this quarter. 

As I've been saying for quite a while now, definitive execution on the EbixCash IPO seems to be all that matters to the stock price in the medium term.  I highlighted in the last report how I think the physical to digital approach is an underappreciated right fit for India, and there other success stories which follow this model.  There also is reason to to look for good performance from the insurance segment, and the addition of Fidelity as a customer this month should help keep that momentum going. 

However, viral impact on the travel segment could still overshadow any other successes.  Vodafone and Nokia have joined the host of other companies that have pulled out of MWC, though in the latter case Nokia plans to travel directly to customers to conduct demonstrations.  Telecom Argentina is its latest win, but that's insignificant compared to America's somewhat hypocritical offensive.  In programming, the mantra is that there's no such thing as "security through obscurity"; the solution lies in the opposite direction.  COVID-19 will be a distant memory before there are any real changes in cyber-security, though, and energy prices are already starting to reflect that.

Brent just poked back above $56 and WTI is a little over $4.50 behind.  Most important to Golar is that natural gas is back up to $1.85 and it is seeing renewed interest in development of one of the world's largest fields.  However, I see all of this in the context of other hydrocarbon companies starting to follow the trail that Shell began blazing years ago.  That's still a long path for individual investors, but not for governments, and the main concern is what role America will play over the long term.  The first of many clues has just dropped, and more of increasing importance will follow in the coming months.

If the current administration remains, then its budget may offer some hope for MVIS in the form of   over 40K IVAS helmets (military version Hololens) to be fielded by the Army in FY21.  The problem is, that although that should start in October, a dysfunctional Congress has almost no chance of approving a budget until after the election.  There are some corporate initiatives as well, but they are training programs and fail to impress in the face of competition.  Some of that comes from Vuzix, and it's latest partnership is chilling in this context, but ramping competition for waveguide production could be equally chilling.  For growth, I prefer to stick with AMSC and EBIX, which have nicely offsetting risk profiles.  Shareholder-friendly high yield also remains attractive and the challenging macro tide could be starting to turn for all but Vodafone.