INTU: Tax Season Ends, Intuit’s Seasonally Strong Stock Period Begins
Late filers swamp Intuit’s Turbo Tax e-file system: Financial News - Yahoo! Finance
A flood of last-minute tax filers swamped Intuit Inc.’s e-filing system early Tuesday, causing long delays for taxpayers trying to check that their electronic returns had been submitted successfully.
The story supports the increased web filing thesis proposed by one of our commenters rather than the losing market share thesis. However, we have maintained all along that neither of those theses are what drives Intuit stock. Instead, it tends to perform seasonally.
Here’s the chart of monthly stock performance for the last 10 years, according to Thompson.
Very consistent underperformance during tax season, which ironically is the best time for their fundamentals (sales and profits.) In February we said:
It goes up in anticipation of tax season, but “sells on the news” while tax season is actually here. The confusion around today’s earnings and all the buying and selling is simply part of the overall process - Intuit getting cheaper during tax season, possibly presenting an opportunity to buy shares with your refund in April.
So far the stock has been performing exactly as the seasonal script lays out.
We just bought some call options in hope that that continues.
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[…] I tried to get excited about the news, which sent the shares up 10% after market hours. But the thing is, I don’t think the news had anything to do with the rally. As I’ve pointed out time and time again, share returns for Intuit are nearly as predictable as the passage of time. In fact, about the only variable one apparently needs to know is whether it is April (buy) or November (sell). Anything in between should use the signal as a reference point to know whether there may still be a play. It’s enough to send Eugene Fama into fits. […]