Last month’s 21% drop in the shares of H And R Block stock should not be viewed as a reason to abandon your investment. Instead, the departure of investors that brought about the drop has the potential to provide the wise investor, with the insight to look to the future, with considerable gains from income in the upcoming quarter.
H And R Block admits that there has been a trend in the past four years of decreased third quarter earnings. In keeping with the established pattern, a decrease was expected this year. A drop to $502 million was projected, but revenue actually dropped to $475 million. This dramatic loss of $79 million far exceeded the loss of 2015’s third quarter, which bottomed out at $37 million.
We feel that this turn of events provides greater earning potential for the fourth quarter than what was originally projected. In past years, individuals have dealt with financial struggles, simply to survive. More recently, many have enjoyed an increase in their disposable, or superfluous, income. This financial shift removes some of the unseen pressure to complete tax returns without delay. Without this pressure, many returns will be completed later. Later returns greater earnings in the fourth quarter. This calls for serious consideration of H And R Block as an investment that could provide significant income opportunities in this quarter.