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The Plus and the Minus Columns of H&R Block

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Great reputation, but the stock isn't exactly on the discount rack right now.

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Asian stocks fell overnight, but not by much. The Hang Seng and the Nikkei were of 0.01% and 0.86%, respectively. European stocks were trading lower as well early this morning. And here in the US, we're currently trading lower.

Here's what I'm seeing this fine, but very crisp Wednesday morning:

H&R Block
(HRB):
The Missouri-based tax-services company received a nice little goose in Tuesday's session. The reason: Barrington Research upped its rating to Outperform.

Personally, I like it, but I don't love it right now.

1. On the plus side of the column, its reputation is great, and I see solid demand for its services well into the future as the tax code seemingly becomes more of a head-scratcher.

2. On the other hand, the stock isn't on the discount rack right now. At right around 14 times this year's estimate, it's probably approaching a fair price. Also, data shows that the estimate for the current quarter is down a penny over the last month or so from $0.17 to $0.16. That's not horrible, just not exactly the way I'd like to see things headed. Not to mention the shares have had a pretty nice run since I last wrote back in June.

3. At the end of the day, I'd rather wait to see if the stock takes a breather at this point before pondering bellying up. That might improve my chance of better returns.

Coinstar
(CSTR):
This was another standout in yesterday's session. The shares rose $0.53 as Global Hunter slapped a Buy rating on it.

My feel:

1. I'm seeing a great deal of people rent movies from those machines located in front of my supermarket -- and I have been, too. There are good titles and it's convenient when you don't want to run all the way to Blockbuster (BBI) or go online for Netflix (NFLX).

2. The company is also coming off two better-than-expected quarters -- also an attractive feature.

3. But as a penny-pincher, I'm not willing to rent here at more than 28 times this year's estimate and at about 17.6 times the 2010 estimate.

Palm (PALM):
What's cooking with the Pixi? There seemed to be some hand-wringing yesterday as the stock took a little slap on the wrist.

One thought:

With not a heck of a lot expected on the earnings front, its chatter like this that has the potential to scare some fence-sitters and some that already have a nice profit in the stock off. Call me old-fashioned, but I want to see a bunch of numbers in the black before I consider bucking on up.

Have a great day and an even better New Year!
No positions in stocks mentioned.

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