Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

H & R Block Inc (HRB) Jumps on Earnings and Buyback Plan; What Do Hedge Funds Think About the Stock?

H & R Block Inc (NYSE:HRB)’s stock opened up over 6% higher today as the company posted a slimmer loss and better-than-expected revenues for the first quarter of its fiscal 2016 ended July 31. Apart from the upbeat quarter, the tax services company also unveiled a $3.5-billion stock buyback plan and said that the deal to sell its banking business will be closed a month faster than expected.

For the first quarter, H & R Block Inc (NYSE:HRB) reported an adjusted net loss of $96 million, or $0.35 per share, and adjusted revenue of $138 million. Adjusted net loss for the same quarter in fiscal 2015 stood at $108 million, or $0.40 per share, while revenue amounted to $134 million. The results were also above analyst estimates of a loss of $0.40 per share and revenue of $136 million.

US Dollar Bill Currency Money

The company’s buyback plan worth $3.5 billion will be implemented through June 2016 and will include a modified Dutch auction tender offer for as much as $1.5 billion in common stock, or 16% of the firm’s capitalization by the end of August, for between $32.25 and $37 per share. The buyback plan will definitely make more than a few of the hedge funds we track, which are long H & R Block Inc (NYSE:HRB), happy. At Insider Monkey, we follow hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically delivered a monthly alpha of six basis points, though these stocks underperformed the S&P500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P500 Index by an average of 95 basis points per month (read more details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, and has returned 118% over the last 36 months, beating the 57.6% gains for the S&P 500 ETF (SPY). We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise rather than large-cap stocks.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading...