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Ebix ( EBIX)

Company Profile: Ebix is a supplier of on-demand software and E-commerce services to the insurance industry. The company says it conducts in excess of $100 billion in insurance premiums on its platforms across the world in life, annuity, health and property and casualty insurance.

Share Price: $14.33 (Sept. 26)

Performance Since July 25: -26.2%

Gundlach's View: Gundlach forecasts big growth in the insurance software industry, as the group is very fragment and there has been a very powerful shift towards digitization.

"The insurance industry is one of the last big areas that has had most operations paper-based," he says. "Now, they're finally seeing the big shift towards digitization. Ebix allows for a cloud-based software as a service platform to handle all of these operations. Their software handles a lot of the operations in the insurance industry, from creating policies to maintenance."

Gundlach calls Ebix's growth in revenue and earnings "explosive." In 2002, the software company earned only 2 cents a share for the year. Analysts are currently expecting full-year earnings of $1.66 a share this year, according to a poll of analysts by Thomson Reuters.

"This is a company that has been growing by double-digits year in and year out, both organically and with some pretty smart acquisitions," Gundlach says. "Even though Ebix has grown incredibly fast for several years, there is quite a bit of running room left ahead." Analysts agree with that assessment, as the average analyst price target of $24.33 represents upside of nearly 70%.

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