I was considering Block until I read this article (it's right here on Yahoo, so just click on the link, I won't paste it all here).
"H&R Block: The Worst Stock in the S&P 500"
"Sure, it might seem unfair to pick on poor H&R Block while it's down, since it was the second-worst-performing S&P 500 company in 2010. But there are simply too many negatives here to see any sunshine on the horizon."
I think this article does a pretty good job of outlining the risks that have led to HRB's stock price decline:
The one other thing I found in the annual report that troubled me was this line from the section on the regulatory environment of their bank:
"In addition, the FDIC has authority to require H&R Block, Inc. to reimburse it for losses it incurs in connection with the failure of HRB Bank or with the FDIC's provision of assistance to a banking subsidiary that is in danger of failure."
I didn't think that parent companies were financially liable for the failure of bank subsidiaries. Not that this seems likely, but it is an extra risk to keep in mind.
My sense is that HRB probably is a pretty good value at these levels. I'll probably buy in if there's a pullback.
Yep. I'm one. Just got my fat dividend a few days ago.
There are risks however, but the value is there and management is taking steps in the right direction. I see the industry consolidating over the next few years with HRB as a buyer. The key will be to maintain market share against their main competitor Intuit which hopefully they will do once the purchase of TaxACT is finalized.
TaxACT also needs to be improved to compete better with TurboTax. Specifically, they need a simple way to import TurboTax data into TaxACT. That would be huge.
I don't agree with very fast importations, etc. Whatever was the reason for not doing due diligence and MAKING SURE there are no errors, etc.
In the old days, things took time, and folks put in their efforts. They cared
about what they signed
their names to.
Perhaps a $50 fine/per
amended line item, after the IRS quantifies the addition error, to be paid by the preparer.
Or better yet, a mandatory one day session on how to be more vigilant, how to proofread, etc., for each
$100 of tabulated misnomers, and illegible entries.
To be taken at the height of tax prep season.