Monday, 25 February 2013

H&R Block: Pocket The Profits

This past December we made a recommendation to consider a long position in H&R Block (HRB) based upon pending tax changes and the benefit that tax software companies should see based upon those changes. Although Intuit (INTU) could also benefit from the changes, we felt that H&R Block was in a better position based upon providing both software and tax preparation services. At this point, the stock has increased over 42% in less than three months.
When a stock increases a large amount in a short period of time, it is always a good idea to step back and listen to the voice of reason. There may be a good and completely justified reason for the increase, meaning that we should continue to hold the stock. However, the increase might also result in higher-than-justified price based upon demand, which would indicate that we should sell the stock and realize our gains.


No comments:

Post a Comment