The peripheral damage from one bad trade often masks itself as other issues - @atmcharts

July 07, 2013

New long term investment idea

I've been writing a series of posts on some long term investment ideas.  This unknown software as a service stock (SaaS) specializing in eDiscovery.  The following is the description of the company from their website:

Epiq Systems is a leading global provider of technology-enabled solutions for electronic discovery, bankruptcy and class action administration. We offer full-service capabilities to support litigation, investigations, financial transactions, regulatory compliance and other legal matters. Our innovative technology and services, combined with deep subject-matter expertise, provide reliable solutions for the professionals we serve.

The long term chart is a beauty.  We are in roughly year 12 of base on base action!  A huge buy signal fires over 15.   

They had 24% growth of their core business YoY in Q1.  On top of that, the company pays a 2.6% dividend. 

My main area of concern is future dividend payments.  The balance sheet is pretty fluffy with over 80% of their assets in goodwill and accounts receivable.  That said, operating cash flow is consistently growing each year with 50% growth in 2012 vs 2011.      

At the end of the day this looks like a fantastic investment with the raging bull market in court proceedings!  

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All ideas shown on this blog represent the authors opinion based on the data available.