Ken Fisher’s 5 New Purchases/Additions

4. Intuit Inc. (NASDAQ:INTU)

Percentage Increase in Stake in Q4: 24%

Intuit Inc. (NASDAQ:INTU) offers software and services for financial management and compliance to individuals, small businesses, independent contractors, and accounting professionals in the United States, Canada, and other countries. Intuit, which presently has more than 100 clients globally, had revenue growth of 11% to 32% during the previous seven years and just two minor YoY sales declines over the last 25 years.

In the fourth quarter, Ken Fisher boosted his stake in Intuit Inc. (NASDAQ:INTU) by 462,468 shares, increasing his total stake size by 24%. He first invested in Intuit Inc. in the fourth quarter of 2017. The stock has struggled in the past six months, dropping more than 14%. However, Ken Fisher still holds more than 2.41 million shares of Intuit Inc. (NASDAQ:INTU), worth more than $939.10 million. 

Intuit Inc. (NASDAQ:INTU) has a consensus rating of ‘Strong Buy’ which is based on 17 buy ratings, 0 hold ratings and 1 sell rating. Durable Capital Partners is the most significant shareholder of Intuit Inc. (NASDAQ:INTU), with 1.75 million shares worth $681.66 billion.

Fundsmith, an investment management company, mentioned Intuit Inc. (NASDAQ:INTU) in its 2022 yearly investor letter. Here is what the fund said:

“Take the example of Microsoft and Intuit Inc. (NASDAQ:INTU). Microsoft shares are currently being valued at a P/E ratio of 25.0 times the consensus EPS estimate for the fiscal year ending June 2023. Meanwhile, Intuit is being valued at 28.4 times the non-GAAP consensus estimate for the fiscal year ending July 2023. Many investors and analysts may accept that Intuit is trading at a higher multiple given expectations of greater growth potential. However, Intuit removes share-based compensation from their non-GAAP EPS whereas Microsoft does not. Given that Intuit’s GAAP EPS guidance for the year ending July 31 2023 is $6.92–$7.22, its non-GAAP guidance is $13.59–$13.89, and the consensus estimate for 2023 EPS is at $13.69, it seems clear that most sell-side analysts are accepting the company’s non-GAAP adjustments, which includes the removal of some $1.8bn of share-based compensation, in their estimates. If we include the impact of share-based compensation in Intuit’s 2023 EPS to make a more apples-to-apples comparison with Microsoft based upon GAAP EPS, Intuit’s 2023 EPS would be closer to $9, meaning that the shares would be trading at a multiple of about 43 times. I think investors and analysts may find a premium of 14% for Intuit over Microsoft (28.4 times versus 25.0 times) to be reasonable. I’m not so sure they are fully aware that Intuit shares are actually trading at a premium of 73% if share-based compensation is treated in the same manner between the two companies….” (Click here to read the full text)