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  "docSlug": "778e2cbfbfaa",
  "documentTitle": "Amdocs Limited (DOX)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "presentationDate": "2019-01-23 00:00:00",
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  "notes": "The slide uses two tables to demonstrate that borrowing is short-lived and investment activity is offsetting, suggesting potential financial manipulation.",
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      "text": "Note pattern change – borrowing in Q2",
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      "text": "We find these patterns difficult to explain from a purely strategic perspective, and worry that they may be evidence of financial engineering.",
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      "text": "short-term borrowing: $200M",
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      "text": "We find these patterns difficult to explain from a purely strategic perspective, and worry that they may be evidence of financial engineering.",
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      "text": "Amdocs has no long-term debt and has been debt-free since the 2000s, and has historically maintained a strong cash balance of over $1B. However, since the late 2000s, management has made a practice of borrowing ~$200M only to repay it within just several weeks at most. This was historically done at fiscal year-end until FY 2017, when management began instead to borrow from Q2 into Q3.\n\nManagement also appears to be “churning” short-term investments: the Company reports “Proceeds from sale of short-term interest-bearing investments” and “Purchase of short-term interest-bearing investments” in almost identical quantities on a quarterly basis, offsetting each other almost exactly and thus leaving Amdocs’ “Short-term interest-bearing” balance sheet line item effectively untouched. Only in Q2 FY 2018 did these values begin to diverge, as management divested of short-term assets and burned cash to finance the new Israeli campus.",
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