Intuit Shares On the Rise, Right On Cue

Apr.19.07 | About: Intuit Inc. (INTU)
Late filers swamp Intuit’s Turbo Tax e-file system:

A flood of last-minute tax filers swamped Intuit Inc.’s (NASDAQ:INTU) e-filing system early Tuesday, causing long delays for taxpayers trying to check that their electronic returns had been submitted successfully.

The story supports the increased web filing thesis proposed by one of our commenters rather than the losing market share thesis. However, we have maintained all along that neither of those theses are what drives Intuit stock. Instead, it tends to perform seasonally.

Here’s the chart of monthly stock performance for the last 10 years, according to Thompson.

click to enlarge
intu

Very consistent underperformance during tax season, which ironically is the best time for their fundamentals (sales and profits). In February we said:

It goes up in anticipation of tax season, but “sells on the news” while tax season is actually here. The confusion around today’s earnings and all the buying and selling is simply part of the overall process - Intuit getting cheaper during tax season, possibly presenting an opportunity to buy shares with your refund in April.

So far the stock has been performing exactly as the seasonal script lays out.

intu 1-yr chart

We just bought some call options in hope that that continues.

Disclosure: At time of publication author is long Intuit (INTU) call options.