Pre-Paid Legal Services, Inc. (PPD)

scam of a company. they target people in the hood...

down you go!!!

just stirring water

The unusual head and shoulders of this stock makes me want to look harder at this, but nothing good is likely to come out of this investigation.

I am a member and very satisfied.

Absolute scam of a company

Everybody needs it; market penetration of only 3%, few know about it; as legal problems rise with economy's downturn, sure to be greater need.

What a joke - A pyramid scheme with a NYSE ticker symbol!

Insiders have sold millions of dollars of their own shares, while propping up the price through company stock buy-backs.

High return on capital and earnings yield.

Using cash flow to re-buy stock so that insiders can sell it. Nice. Maybe Eddie Lampert will be the next CEO.

If you act now, and get five people in the pyramid, I mean triangle of wealth building, beneath you - wealth is guaranteed! For me.

Pre-Paid Legal Services provides legal services in USA and Canada. It has very attractive P/E and P/S values. With no debt this company offers excellent Return on Assets/Equity. It has a sizable (9%) insider ownership.

This stock is a joke. The company buys back its own stock to boost it's EPS ratio. A sure sign that managment is up to something. The numbers seem too good to be true and thats because they are.

The EPS might have increased but that is because your revenue decreased 3% and your cost decreased by 6%, and the number of outstanding shares decreased. However, the "General and Administrative" cost and expense remain almost exactly the same.(Guess Harland and Company won't be cutting their salary when as the company diminishes).

The biggest expense that was down was your commissions paid. Which was down almost $6 million, and it is down because people are not selling your product. The EPS is a ratio. Your net income might have gone up but your net income is still only $1 million more than the first 6 months last year (Thats a 3% increase.)

So a
3% decrease in revenue
6% decrease in expenses
= +3% increase in net income. (-3 - -6 = +3)

Now on to the current quarter (Q2 '09)

Revenue DECREASED 3.97%
Expenses DECREASED 7.09%
=+4.88% increase in net income (-3.97 - -7.09 = +4.88)

My point is the company is shrinking not growing. The reason this looks good is because the commissions being paid are expenses. When there is a decrease in revenue in membership fees there will be a decrease in commissions paid because less is being sold. If you can prove that last sentence wrong I will never post on this message board again. (refer to statement on page 12 of 10-q "Net income increased 5% for the second quarter of 2009 to $15.8 million
from $15.1 million for the prior year's second quarter primarily due to a decrease in commission expense of $1.9 million" - direct quote)

Now lets compare...(Directly from most recent 10-Q)

2009 (sixmonth) | 20008 (sixmonth)
----------------------------------
Revenue |
-------- |
Membership Fees $105,516 | $109,456

------------------------
-3.6%

Expenses |
--------
Commisions Paid $29,335 | $31,196
--------------------------
-5.9%

Net Income $32,892 | $30,998
---------------------------
+6.11%

BAsic EPS $2.97 | $2.54
---------------------------
+17%

example: I sell 100 memberships. I make $10 for every membership I sell. So I made $1000. If 10 of my members drop the service in the first 3 months, after chargebacks, I made $900. That is a 10% decrease in membership and a 10% decrease in commissions paid.

Now I might be incorrect on this next statement, so explain this to me if I am wrong but. If the amount of commissions paid is 2.3% less than the decrease in memberships that must mean that the company keeping commissions from its associates. Or that 2.3% of new members paid for less that six months of services and the associate made no commission while the company still got paid....maybe? Let me know what you think this means?

Now, the EPS. The EPS is a simple ration. Earnings divided by shares outstanding. Now the earnings of the company did increase 6.11% (congratulations, you lost more members in the first 6 months and had to pay no commission of that revenue, like mentioned above), yet the EPS increase 17%. Well this is simple math. If the net income increases 6.11% and the # of outstanding shares remains the same. The EPS will grow 6.11%. If the net income increase 6.11% and the outstanding shares DECREASE by, lets say ~450,000 (sound familiar, the amount of shares bought back by the company in 2009) than the EPS will go up! This is one way the company manipulates its share holders by thinking the company is doing better than it actually is. (Just to compare, Googles 10-q shows a 8.8% increase in net income, and a 8.1% increase in Basic EPS. See how that works)

Now I understand this is a lot of information so please!!!!, respond with logical, factual, evidence, that can be supported with legitimate references!!!!

(and no i didnt proof read it, so don't be immature and knock my spelling)

Even those who are employed at this time, need this service. Those who are unemployed need it even more!!

I work for this company as a sales rep

An invaluable service and a vigarous company with excellant numbers HOWEVER, the legal profession will not rest until it destroys this attempt at an HMO for lawyers. You will read and hear PONZI and FRAUD until they kill this company and its basis.Don't bet against the Bar.

Great product. Many do not understand the product, so they belittle it. Product is vital!!!

Great company with a great product that few understand, even some that have the membership.

Nearly a half billion market cap for phoned-in legal advice?

$462,000,000.00, that can't be right! I wouldn't buy it if it were a $46.2 million market cap. I may consider it if it were a $4.6 million market cap.

So, if this stock drop 99%, I will switch my pick to outperform. Unfortunately, Fool wouldn't let me pick it at that point.

Total ponzi/pyramid scheme. Limited pool of suckers because of nature of biz (legal), so cannot expand internationally like an Amway-type scheme.

First item to be cut when your budget gets tight. Plus this service is pretty weak. You pay a monthly fee and get a 1-800 # for a lawyer.