(Photo: Nick M Do/Getty Images)
Blogger note: Next year it will cost Canadians $50 to file on paper... you'll need a tax pro like H&R Block (stock has nearly tripled over the last year so its not a purchase candidate until after tax season and the good news is behind them...) or software by a company Intuit (share price is already reflecting some 'seasonality' of its e.p.s. news)
Maybe it bears watching these companies for dips in the share prices...
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With the tax-filing deadline around the corner, many Canadians are trying to figure out ways to get money back from the government. While it’s important to crunch every number, there is another way to make some cash come tax time:
own the company that makes the tax-preparation software you’re using.
You probably know Mountain View, Calif.-based Intuit (NASDAQ: INTU) better by the products it makes—TurboTax, Quickbooks and Mint, to name three. It’s even possible you shelled out a few bucks for the software this month. A number of analysts think you can make back that purchase price and more by owning the stock, which is up 11% year-to-date and climbing.
There are two reasons for the optimism.
The first, says Gil Luria, an analyst for Wedbush Securities, is the long-term shift toward mobile.
“We believe Intuit will benefit disproportionally as the shift to mobile accelerates,” he wrote in a February 21st report. “Our analysis of mobile data indicates TurboTax has between a 10 times to 30 times advantage in mobile compared to a 4 times overall market share advantage last year.”
The second reason is more near-term. U.S. data suggests Americans are filing later this year than last so the company should get a bigger boost in the third quarter. (Revenues for its consumer tax division were down 27% year-over-year in Q2, but Intuit has said that much of the money that was supposed to be made last quarter will come in Q3 instead.)
Despite that loss, the company posted earnings per share of $0.33, $0.03 cents above consensus estimates. Its overall revenues of $968 million were down 3% year-over-year, but $5 million above what analysts had expected. It was strong sales from other divisions, such as financial management solutions, financial institutions, payroll and payment processing, that helped keep revenues high.
Wayne Johnson, an analyst at Raymond James, thinks the company can increase revenues by 10% and earnings by 15% long-term.
He says investors like the company’s growth profile, high-margin product mix, recurring revenues from user fees, and share buy back strategy coupled with a 1.02% yield.
While the yield may not seem that great, it did increase to $0.17 from $0.15 in October and Johnson thinks it will continue to grow.
Both Johnson and Luria have buy ratings on the company and think its $66.50 stock price could climb to $68 and $71, respectively.
