SCI: You mean we lost Half the Market Cap in our Prepaid Funeral Fund!

The Worlds#1 Funeral Corp is dancing with deferred revenue death.Yes, the ” B” word and the large corporate graveyard that exists in the United States of America may apply to Service Corporation International(SCI) in the near  future.

Let us take  a brief look at Service Corp (SCI),  the world’s  largest provider of funeral  and cemetery services. Deferred revenue is defined as revenue you will receive in the future. For the average corporation this is not a big deal. But for a corporation in the funeral business it is quite different, deferred revenue is a major part of their business.

For funeral businesses it is called prepaying  a funeral or funeral preneed.  Companies like NYSE:SCI have been doing this for a long time.It is like paying admission to a movie. The theater holds your money until the movie begins. In the case of the funeral the movie might not start for quite a few years. So the funeral company invests the money. A 1.2 Billion dollar Market cap with unrealized preneed losses of 600 million means a  50% loss. It amazes me how corporations confuse us with big numbers in their reports. A 50% loss is a 50 % loss.

In the case of Service Corporation International they  LOST half of their  money in preneed funds!

This is an indication of an impending funeral business disaster.  SCI and the funeral industry say they are secure because people always die. That is not true if all your money is gone!

If you have trouble trusting this funeral guy, consult a stock expert at Seeking Alpha

“Unfortunately, much of this money has been lost. The company has unrealized losses of over $600 million in these accounts! With SCI having a market cap of just $1.2 billion, this is not an insignificant amount.”-Saj Karsan

Maybe this would be reason enough not to do business with these folks.

Funeral Industry| Funeral Costs Blog by Your Funeral Guy.

Source: Seeking Alpha

Technorati Tags: blog, cemetery, funeral, funeral business, funeral industry, Funeral preneed, market cap, NYSE, preneed, provider, SCI, service corporation international, services

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