H&R Block Comes Through on Q4 Earnings

On Monday, H&R Block (HRB) exploded to the upside by gaining 9.96%. The reason for the increase in the price was due to "better than expected" earnings (no surprise here). (See Q4 conference call transcript). At the time that I made the recommendation, there were naysayers on this site who thought that I had to be crazy to consider HRB worth investing in. Some of the points made by the critics seemed pretty convincing. However, my main concern was the viability of the company and the ability of other investors to recognize the upside potential.

Since the stock was recommended on my blog on May 19, 2009, we have seen the price increase by 19%. Again, my ideal is to acquire the stock as close to the low as possible and then sell the stock as investors start to realize the qualitative elements.

Initially, the qualitative elements of every stock seems like a subjective matter. However, according to Geraldine Weiss, author of Dividends Don't Lie, the dividend is the one thing that cannot be manipulated. Using the extended dividend payment history (Dividend Achievers only) results in a fair assessment of the overall quality of the stock and in turn the company as well.

While I could provide a data dump showing all the ratios and regression analysis I can do on a stock, the reality is that we as investors need something that is reliable, proven and simple. Demonstrating that I'm a smarty-pants with corporate financial numbers will only serve to further confuse the uninitiated. For those that have an interest, they can run the numbers on their own.

After I recommended selling HRB on Friday June 5th, the stock has gone up by 7%. This is great as far as I'm concerned. I have accomplish my goal of "seeking fair profits."

Besides, I don't wish to hold a stock when others are willing buy at a higher price. My long-term goal is to get some of the gains all of the time rather than try to get all of the gain once in a while.

Related articles:

• HRB Research Recommendation
• HRB Sell Recommendation

Disclosure: No positions