EPIQ Systems, Inc. (NASDAQ:EPIQ)

CAPS Rating: 3 out of 5

A provider of technology-based solutions for the legal and fiduciary services industries. Its products and services assist clients with the administration of complex legal proceedings.

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Member Avatar bassy31 (93.97) Submitted: 11/17/2006 2:10:57 PM : Underperform Start Price: $10.23 EPIQ Score: -9.02

I won't lie -- I'm a little bitter that Matrix waited until the day after I finally gave up on these clowns (in real life and in CAPS) before upgrading them from 'strong sell' to 'strong buy,' but I'm happy at least to take advantage of that temporary 5% spike for my thumbs-down pick here.

Overpromising and underdelivering is not the road to riches (at least not for outside shareholders...it seems to be working out pretty well for EPIQ's management).

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Member Avatar bunker72070 (20.70) Submitted: 10/21/2006 9:25:01 AM : Underperform Start Price: $9.72 EPIQ Score: -12.58

Strict debt covenants will provide little flexibility and will force either further dilution or more risk in debt accumulation.

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Member Avatar dilettantedude (96.14) Submitted: 10/17/2006 4:24:58 PM : Outperform Start Price: $9.78 EPIQ Score: +12.24

Epiq dominated the bankruptcy filing software niche. The consistently generate high free cash flow, and have a high ROIC. They are counter-cyclical, as they do better when bankruptcies rise, so they are a good counterweight to the market, and they're currenly selling at a discount to fair value, calculated as the present value of future free cash flows.

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Member Avatar ari21 (74.78) Submitted: 9/24/2006 2:39:53 PM : Outperform Start Price: $9.78 EPIQ Score: +8.05

With the fall in housing, and the increases in debts I believes we see a big increases in earnigns for this company. As soon as they digests the recent buys , will see surprisisng grow .

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Member Avatar Swizzled (< 20) Submitted: 6/14/2006 2:47:25 AM : Outperform Start Price: $10.09 EPIQ Score: -4.19

There are two big things that I don't like about me investing in this company. One is that because they are acquisition prone, it is tough to be certain what the financial statements are telling us and also it is difficult to predict what future results are apt to look like. Two, they have taken on a great deal of debt to fund the most recent acquisition. Both items increase risk substantially. But outperform I say. The reason is that I think the company is undervalued in relation to it's growth prospects. The high amount of amortization that runs through the income statement (relating to acquisitions) masks the underlying cash flow creation which is pretty much double net income after backing our capex. Besides the cash, things to like are founders of the company are still manager owners with significant interest, and servicing the debt industry looks to be a high growth area with record personal debt levels, rising interest rates and potential fallout from real estate bubble.

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