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

Meanwhile, according to Bill Cobb, H & R Block’s president and chief executive officer, the successful divestment of its bank business to Bofl Holding Inc. a month earlier than expected will allow the firm to focus on preparations for the upcoming tax season. Nonetheless, it should be noted that the firm expects the net financial impact of the sale to be dilutive by $0.08 to $0.10 per share per year beginning in the current fiscal year. H & R Block also expects one-time charges for the deal between $0.02 to $0.03 per share to be reflected in its annual results. However, another advantage of the closed deal is that the company will no longer be subject to savings and loan holding company regulations which lessens the firm’s required capital levels. On the back of the deal, H & R Block expects excess capital of as much as $1 billion.

These positive developments at H & R Block Inc (NYSE:HRB) appears to have been anticipated by the hedge funds we track. While the total value of holdings of hedge funds decreased by over 8% quarter-over-quarter to $926.1 million at the end of June, this is mostly explained by the 7.55% decrease of the stock during the second quarter. However, the number of funds with long positions went up to 44 versus 36 a quarter earlier. Moreover, a total of 11.30% of the firm’s stock is owned by hedge funds we track, pointing to a general bullish sentiment.

H & R Block Inc (NYSE:HRB)’s largest shareholder at the end of June, among the hedge funds we track, was First Eagle Investment Management, which owned 5.85 million shares worth approximately $173.4 million. Michael A. Price and Amos Meron’s Empyrean Capital Partners bought the largest new stake in H & R Block during the second quarter, and disclosed holding 1.65 million shares in its latest 13F, while Israel Englander’s Millenium Management increased its stake in the firm by a whopping 8,711% to some 1.25 million shares.