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H&R Block: Returns from taxes


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by Leo Fasciocco, editor Ticker Tape Digest

Tax preparer H&R Block (HRB) as almost doubled the past two years. In recent trading it broke out from a six-week base. The stock also shows important insider buying in recent months.

HRB provides tax return preparation, electronic filing of income tax returns and other tax-related services. Its subsidiaries also offer investment services through broker-dealers, originate, purchase, service, sell and securitize mortgages.

The firm also offers personal productivity software, purchase participation interests in refund anticipation loans made by a third-party lenders, and offer accounting, tax and consulting services to business.


Being in the tax business, the company's earnings are seasonal with the bulk coming in the quarter ending in April; for that important fourth quarter , the firm should rack up a 20% gain to $2.41 a share from $2.01 a year ago.

The stock sells with a price-earnings ratio of just 11. It is a low volatile issue, with a beta of 0.55 versus 1.00 for the S&P 500 index. That means it is about half as volatile as the market.

Institutional sponsorship is excellent. A key fund buyer recently was 5-star rated First Eagle Global Fund which purchased 2.7 million shares.  

Meanwhile, insider activity is bullish. Insiders have been getting stock options at $16.47. They have done no selling. That means they will push to get the stock price higher.

Learn more about this financial newsletter at Leo Fasciocco's Ticker Tape Digest.

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