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Viking Global Buys 6 Million Shares of H&R Block

March 31, 2011 | About:

Holly LaFon

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Guru Andreas Halvorsen’s hedge fund, Viking Global Investors, bought 6,256,222 shares of H&R Block (HRB) at an average share price of $16.23 on March 21. He now owns 16,664,422 shares. Since then, the stock price has increased by 3% to $16.76. Viking Global Investors was founded in 1999 by Andreas Halvorsen and David Ott, both former Tiger Management members, and has $12 billion under management in two hedge funds. It invests using a bottom-up stocking picking approach and selects securities using a long/short strategy. H&R Block was one of the top 25 largest stocks Halvorsen added to Viking’s portfolio in the last three months of 2010.

H&R Block Inc. is a diversified company involved in tax return preparation, electronic filing of income tax returns and other tax-related services. H&R Block Inc. has a market cap of $5.11 billion; its shares were traded at around $16.76 with a P/E ratio of 11.5 and P/S ratio of 1.3. The dividend yield of H&R Block Inc. stocks is 3.6%

The stock price of H&R block has been climbing steadily since it sunk to a 52-week low in October, 2010, although it has dropped enormously over the past five years. A recent GuruFocus analysis attributes the long-term decline to the threat to the company of loss of funding for Refund Anticipation Loans (RALs), the growth in market share for TurboTax and other digital solutions, and mortgage putbacks from its legacy mortgage origination activities. The company’s sales fell 10% in the third quarter.

H&R Block nevertheless remains in the portfolios of numerous gurus including Joel Greenblatt and Donald Yacktman.

For the latest stock trades by Gurus, go to: Real Time Picks.


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