UPDATE: Morgan Stanley Upgrades H&R Block to Equal-Weight on Potential Affordable Care Act Windfall


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


In a report published Friday, Morgan Stanley Upgraded H&R Block (NYSE: HRB) to Equal-Weight and raised its PT from $17 to $23.Morgan Stanley reported that, “We assume HRBgrows assisted volumes 4.4%, driven by market growth 1%above IRS forecasts (IRS officials have told us its latestforecasts include upside from the Affordable Care Act, but IRShas not been perfect at forecasting in the past) and HRB'sassisted business takes market share because of the addedcomplexity / HRB's smart marketing. We do not include pricingupside from the ACA – we believe it's still unclear if the IRSwill require another form, with HRB management onThursday's call noting that Massachusetts is not a good proxyfor the rest of the country. In addition, the assisted tax prepindustry remains very competitive (as the dominant player,HRB still only has 18% market share, the 2nd largest companyhas only 3% share). If there is a permanent increase in thenumber of filers, given high retention and referral rates, wewould expect companies would be aggressive on price tosecure these customers long-term.Shares of H&R Block closed at $24.98 on Thursday.

27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


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