Also, still a better buyer of 13s relative to 14s in the senior debt.
This is my effort to help fit the pieces together to get a better picture of the capital markets.
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”
Wednesday, November 3, 2010
H&R Block - Thesis is Intact - BUY equity and HRB 13s.
As I mentioned Tuesday, HRB bonds were strong and the stock should follow suit. Well, while the equity was down on Tuesday (less than 10bps, but still) I still like the thesis and the trade. Bonds continued strong today with the 14s trading at par, so a minor equity dip doesn't scare us off.
I think the fundamentals warrant a higher price (not saying this is a gem of a company - given OptionOne and their RAL problem, just that the company is currently undervalued) and momentum is on my side.
Also, still a better buyer of 13s relative to 14s in the senior debt.
Also, still a better buyer of 13s relative to 14s in the senior debt.
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Great call. Got long HRB and feeling good.
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