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Sundeep Kutumbaka and George Bocchetti.  Buy: Limit at $18  Sell: Stop at $20, Limit at $22.

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Presentation on theme: "Sundeep Kutumbaka and George Bocchetti.  Buy: Limit at $18  Sell: Stop at $20, Limit at $22."— Presentation transcript:

1 Sundeep Kutumbaka and George Bocchetti

2  Buy: Limit at $18  Sell: Stop at $20, Limit at $22

3  Provides tax, banking, accounting and business consulting services and products  Prepares 1/7 tax returns  Had an office within 5 miles of most Americans  Employs more than 110,000  Has helped clients obtain nearly $30 billion in tax refunds, credits  Founded in 1955  Headquartered in Kansas City, MO

4  Tax Services = 74.3% of revenue  Provides tax return preparation services in Unites States, Canada, Australia  Markets TaxCut income tax preparation software  Business Services = 22% of revenue  RSM McGladrey, Inc. (RSM) provides accounting, tax and business consulting services  Consumer Financial Services = 3.5% of revenue  provides retail banking offerings through HRB Bank

5  Current Price: $18.08  P/E Ratio:12.07  Beta:0.49  Dividend/ Yield:$0.15/ 3.32%  EPS:$1.50  52-Week Low:$13.73  52-Week High: $25.94  Market Cap: $6.60B  Institutional Ownership:85% Taken from http://www.google.com/finance?q=hrb as of 10/04/09http://www.google.com/finance?q=hrb

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12  Loss of $130.6 million, or 39 cents per share  Vs. loss of $128.4 million, 39 cents per share a year before  Vs. estimates of loss of 37 cents per share  Typically lose in Q1, Q2 and gain in Q3, Q4  Taxes are seasonal: most revenue from Jan-April  Exacerbated by increase in Tax Services expense  Reaffirmed guidance for FY10  Upgraded September 8 th, 4 days after release

13  Largest provider of tax preparation services in the world  Low in their yearly cycle  Just beginning to gain  Respected, trusted brand name  Compared to unknown competition  Unstoppable business  All adults have to file a tax return

14  Even small tax changes increase business  Multiple markets:  US, Canada, Australia  Multiple businesses:  Tax services, tax software, banking, business consulting  Cutting down excess businesses  Investment advisement, subprime mortgages

15  Trying for new public image  Revamped, professional storefront  More serious advertising campaign ▪ Multiple platforms ▪ Shareholders at last meeting applauded demo ad  Reduced prices for low-income, young clients  Honor federal college credits  Hiring nearly 15,000 tax professionals

16  Jackson Hewitt Tax Service, Inc (JTX)  Market cap of only 135M  Less diversified, smaller client base, smaller market  Downgraded at Oppenheimer in August  Drop of 13% in tax return volume in 2009 season  Gilman Ciocia, Inc (GTAX)  Serves mostly middle and upper class  Only in New Jersey, New York, and Florida  Intuit, Inc (INC)  TurboTax software, but no walk-in offices

17  Our recommendation: Watch and buy on pull back, at Limit of $15  Sell: Stop at $19, Limit at $22

18  Designs, manufactures, markets Invisalign  A method for treating the misalignment of teeth  Alternative to visible, cumbersome braces  Invisalign is regulated by FDA as a Class II medical device  Incorporated in 1997  First sales of Invisalign to orthodontists in 1999  By late 2001, manufactured one million aligners  Headquarters in Santa Clara, CA

19  The Invisalign system is comprised of  ClinCheck: creation of digital treatment plans  manufacturing of customized Invisalign aligners  Sells Invisalign directly to consumers, dentists, and/or orthodontists  Also sell retainers, ancillary products  Cleaning material, adjustment tools for Invisalign  Operates in North America, Europe, Asia- Pacific, Latin America, and Japan

20  Invisalign Full  Complete, personal treatment  Invisalign Express  Pre-made for various categories of treatment  Invisalign Teen  Aligner wear indicator to gauge patient compliance  Retention  Vivera retainers for Invisalign/non-Invisalign patients  Ancillary Products  Support Invisalign

21  To date  trained more than 56,700 doctors  manufactured more than 44 million unique Invisalign aligners  started more than 1,000,000 patients in treatment  reached $1.5 billion in cumulative net revenues  complied IP portfolio of more than 160 patents  provides exclusive education events at more than 60 universities worldwide

22  Current Price: $15.82  P/E Ratio:13.61  Beta:2.12  Dividend/ Yield:N/A  EPS:$1.16  52-Week Low:$4.88  52-Week High: $16.45  Market Cap: $1.05B  Institutional Ownership:88% Taken from http://www.google.com/finance?q=algn as of 10/15/09http://www.google.com/finance?q=algn

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29  Q2 Earnings Report released July 23 2  EPS of $0.07 2  Compared to estimate of $0.01 2  Revenue of $76.3 million 2  Compared to estimate of $69.4 million 2  27% increase in international revenue 2  Share price rose 14% after release 2  Predicted Q3 earnings in current range 2

30 YearDateActual Last Avg Estimate $ Surprise 2009Jun-090.070.010.06 2009Mar-090.04-0.020.06 2008Dec-080.980.020.96 2008Sep-080.080.020.06 2008Jun-080.060.050.01 2008Mar-080.070.020.05

31  On a rally  Varied product lineup  Multiple markets  North America, Europe, Asia-Pacific, Latin America, and Japan  Over a million existing clients  And growing

32  Upgraded to Buy at Northcoast on Oct 1  Increase in year-over-year case starts  Buy rating reaffirmed at Brean Murray  Recently released new features  Based on customer research and treatment data  Make Invisalign effective for more bite types

33  Ended patent litigation with Danaher Corporation's Subsidiary Ormco Corporation  Exclusive agreement to work on combination orthodontic product  Should lead to an increase in sales  Beat estimates in last 6 earnings reports  Will probably beat again on October 22 nd

34  3M Company (MMM)  Diversified technology company  No specific product that competes with Invisalign ▪ Nothing invisible  DENTSPLY International, Inc (XRAY)  A few competitive products ▪ Not as extensive a lineup  No marketing ▪ Not as well-known

35 ALGN: 1. http://www.reuters.com/finance/stocks/companyProfile?rpc=66&symbol=ALGN.O http://www.reuters.com/finance/stocks/companyProfile?rpc=66&symbol=ALGN.O 2. http://www.reuters.com/article/rbssHealthcareNews/idUSBNG53802820090723 http://www.reuters.com/article/rbssHealthcareNews/idUSBNG53802820090723 3. http://www.orthodonticproductsonline.com/news/2009-09-24_01.asp http://www.orthodonticproductsonline.com/news/2009-09-24_01.asp 4. http://www.marketintelligencecenter.com/articles/962561 http://www.marketintelligencecenter.com/articles/962561 5. http://online.wsj.com/article/BT-CO-20091001-709097.html http://online.wsj.com/article/BT-CO-20091001-709097.html 6. http://www.reuters.com/finance/stocks/keyDevelopments?rpc=66&symbol=ALGN.O&timestamp=20090817121900 http://www.reuters.com/finance/stocks/keyDevelopments?rpc=66&symbol=ALGN.O&timestamp=20090817121900 7. http://finance.aol.com/earnings/align-technology-inc/algn/nas/earnings-release http://finance.aol.com/earnings/align-technology-inc/algn/nas/earnings-release 8. http://finapps.forbes.com/finapps/jsp/finance/compinfo/Earnings.jsp?tkr=ALGN http://finapps.forbes.com/finapps/jsp/finance/compinfo/Earnings.jsp?tkr=ALGN 9. http://finance.aol.com/charts/align-technology-inc/algn/nas/classic-charts http://finance.aol.com/charts/align-technology-inc/algn/nas/classic-charts 10. http://www.thestreet.com/quote/ALGN/details/earnings-estimates.html http://www.thestreet.com/quote/ALGN/details/earnings-estimates.html 11. http://www.aligntech.com/Pages/About.aspx http://www.aligntech.com/Pages/About.aspx 12. http://www.google.com/finance?q=algn http://www.google.com/finance?q=algn HRB: 1. http://www.hrblock.com/company/index.html http://www.hrblock.com/company/index.html 2. http://www.google.com/finance?q=hrb http://www.google.com/finance?q=hrb 3. http://www.reuters.com/finance/stocks/companyProfile?symbol=HRB.N&rpc=66 http://www.reuters.com/finance/stocks/companyProfile?symbol=HRB.N&rpc=66 4. http://finance.aol.com/charts/block-h-and-r-inc/hrb/nys/classic-charts http://finance.aol.com/charts/block-h-and-r-inc/hrb/nys/classic-charts 5. http://finance.aol.com/charts/align-technology-inc/algn/nas/classic-charts http://finance.aol.com/charts/align-technology-inc/algn/nas/classic-charts 6. http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=BCOM&date=20090904&id=10365317 http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=BCOM&date=20090904&id=10365317 7. http://newstribune.com/articles/2009/09/04/business/118biz51blockpr09.txt http://newstribune.com/articles/2009/09/04/business/118biz51blockpr09.txt 8. http://finance.aol.com/earnings/block-h-and-r-inc/hrb/nys/earnings-release http://finance.aol.com/earnings/block-h-and-r-inc/hrb/nys/earnings-release 9. http://industry.bnet.com/financial-services/10003127/ceo-smyth-promises-peace-of-mind-at-hr-block-with-customer-centric-focus/ http://industry.bnet.com/financial-services/10003127/ceo-smyth-promises-peace-of-mind-at-hr-block-with-customer-centric-focus/ 10. http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20090908&id=10371672 http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20090908&id=10371672 11. http://www.herald-dispatch.com/news/x883085341/Tax-credit-available-for-college-costs http://www.herald-dispatch.com/news/x883085341/Tax-credit-available-for-college-costs 12. http://www.mlive.com/news/saginaw/index.ssf/2009/09/hr_block_hiring_15000_tax_prep.html http://www.mlive.com/news/saginaw/index.ssf/2009/09/hr_block_hiring_15000_tax_prep.html 13. http://www.huliq.com/1/87094/manager-keep-comcast-h-r-block-and-hasbro-radar http://www.huliq.com/1/87094/manager-keep-comcast-h-r-block-and-hasbro-radar 14. http://www.seattlepi.com/business/1310ap_us_hr_block_meeting.html http://www.seattlepi.com/business/1310ap_us_hr_block_meeting.html 15. http://www.google.com/finance?q=OTC:GTAX http://www.google.com/finance?q=OTC:GTAX 16. http://www.google.com/finance?q=NASDAQ:INTU http://www.google.com/finance?q=NASDAQ:INTU 17. http://www.google.com/finance?q=NYSE:JTX http://www.google.com/finance?q=NYSE:JTX 18. http://www.reuters.com/finance/stocks/companyProfile?symbol=JTX.N&rpc=66 http://www.reuters.com/finance/stocks/companyProfile?symbol=JTX.N&rpc=66 19. http://www.iii.co.uk/news/?type=afxnews&articleid=7496335&action=article http://www.iii.co.uk/news/?type=afxnews&articleid=7496335&action=article 20. http://caps.fool.com/Blogs/ViewPost.aspx?bpid=223597&t=01003070853754792343 http://caps.fool.com/Blogs/ViewPost.aspx?bpid=223597&t=01003070853754792343

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