I'm always intrigued when two leading advisors using different strategies each are attracted to the same stock. In this case, John Dessauer, a global expert with a fundamental approach, and Joe Sunderman, a sophisticated technical and contrarian analyst, are fans of H&R Block.
(For more information on these advisors, simply click on their photos.)
"H&R Block (HRB NYSE)
reported an excellent second fiscal quarter," says John
Dessauer, editor of Investor’s
World. "Wall
Street expected a loss of $0.06 a share. Instead, H&R Block delivered a
profit of $0.06 a share. Growth in the mortgage business and strength in
the Australian tax season were the primary drivers of the profit. This is
the first time H&R Block has had a second-quarter profit. Profits are
seasonal, with the majority coming during the US tax season, but this quarter
shows diversification can smooth out profits. For this year, management
estimates $3.56 to $3.72 a share. I won't be surprised to see the company
beat the high end of that range. At 14 times this year's estimates, the
stock remains a Buy."
H&R Block is also a
recent "featured stock" from Joseph Sunderman, analyst with
Schaeffer's Investment Research. He explains,
"Financial-services name H&R Block recently reported precedent-setting
earnings. This is particularly significant because the second quarter has
historically been the company's slowest, and this move into profitable territory
for the reporting period was a first. Technically, the stock recently made a new
all-time high and has been outperforming the S&P 500 Index since September,
but despite this strong fundamental backdrop and price action, traders remain
skeptical. Short interest is also extremely notable; it would take over eight
days (based on the stock's average daily volume) for all short positions to be
covered. Analysts are also ignoring HRB, as only four currently cover the stock,
three of whom rate HRB a ‘hold’. We recommend initiating a long position on HRB
with a target of 62 and a stop- loss on a close below
50."
