Liberty Tax Swing Long Seasonal Setup

Time to look at publicly traded tax preparation stocks ahead of the end-of-year tax season. A stock that looks like a compelling swing long setup is Liberty tax.

Founded in 1997, Liberty Tax, Inc. is the parent company of Liberty Tax Service. In the U.S. and Canada, last year, Liberty Tax prepared over two million individual income tax returns in more than 4,000 offices and online.

Liberty Tax Stock Chart

Liberty Tax stock chart.

Large players volume and the CMF are rising nicely. I’m watching the resistance level at $14.40 for a possible entry. There is a support zone below the current price at 14.02, a stop order could be placed below this zone.

Liberty Tax Review
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Summary

Profitability

Liberty Tax's (TAX) Return On Assets of 6.86% is among the best returns of the industry. TAX outperforms 88% of its industry peers. The industry average Return On Assets is 2.56%. TAX's Return On Equity of 11.97% is among the best of the industry. TAX does better than the industry average Return On Equity of 8.08%. TAX has a good Piotroski-F score of 7.00. This indicates a good health and good profitability for TAX. TAX's Profit Margin of 7.25% is worse than the rest of the industry. The industry average Profit Margin is 21.27%.

Valuation

The Forward Price/Earnings Ratio of 11.88 indicates that TAX is cheap right now. TAX's low PEG Ratio, which compensates the Price/Earnings for growth, also indicates the stock is cheap right now. The Price/Earnings Ratio is 17.38, which indicates a rather expensive valuation of TAX. Compared to an average industry Price/Earning Ratio of 22.00, TAX is valuated inline with its industry peers. With a price book ratio of 1.71, TAX is valued correctly. When comparing the price book ratio of TAX to the average industry price book ratio of 1.39, TAX is more expensive than its industry peers.

Growth

Based on estimates for the next 2 years, TAX will show a very strong growth in Earnings Per Share. The EPS will grow by 28.92% on average per year. The EPS growth is accelerating: in the next 2 years the growth will be better than in the last years. The Earnings Per Share has been decreasing by -8.09% on average over the past 5 years. Looking at the last year, TAX shows a small growth in Revenue. The Revenue has grown by 1.14% in the last year. TAX shows a small growth in Revenue. Measured over the last 5 years, the Revenue has been growing by 3.47% yearly. TAX shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -28.70%.

Health

Liberty Tax (TAX) has a Current Ratio of 3.07. This indicates that TAX is financially healthy and has no problem in meeting its short term obligations. The Current Ratio of TAX is much better than the industry average of 1.67. A Quick Ratio of 3.07 indicates that TAX has no problem at all paying its short term obligations. The Quick Ratio of TAX is much better than the industry average of 1.69. The Debt to Equity ratio for TAX is way better than the industry averages. An Altman-Z score of 3.80 indicates that TAX is not in any danger of bankruptcy at the moment. TAX has one of the better Altman-Z scores in its industry. It is much better than the industry average of 0.93. TAX has better score than 91% of its industry peers. TAX has a good Piotroski-F score of 7.00. This indicates a good health and good profitability for TAX.

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Lance Jepsen

For ethical purposes, I try not to hold any position in any stock I profile on GuerillaStockTrading.com unless specifically stated in the article. Owner of GuerillaStockTrading.com. Seasoned entrepreneur, investor, and writer. I love God, family, country, stock trading, economics, and helping people learn how to trade.
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Author: Lance Jepsen

For ethical purposes, I try not to hold any position in any stock I profile on GuerillaStockTrading.com unless specifically stated in the article. Owner of GuerillaStockTrading.com. Seasoned entrepreneur, investor, and writer. I love God, family, country, stock trading, economics, and helping people learn how to trade.

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