Intuit Overview
Copyright 2009 by Morris Rosenthal - - contact info
- IBM
- Amazon (AMZN)
- MSFT (Microsoft)
- ORCL (Oracle)
- SAP (ADR for SAP)
- INTU (Intuit)
- EBAY
- SYMC (Symantec)
Copyright 2009 by Morris Rosenthal
All Rights Reserved
Notes on trading INTU stock for investing
Intuit is primarily known for their QuickBooks accounting software (both consumer and small business) and their tax software, TurboTax. The tax software can be seen as a niche field (with competition from H.R. Block's TaxCut software), but their Quicken software competes heads-up with Microsoft's Money product (some would say that Money is no competition), and if I recall, Microsoft actually tried to acquire Intuit some years back but was discouraged by the anti-trust folks. Intuit currently has a market cap of around $9 billion, making it bigger than well know chip makers AMD and Micron. INTU is a favorite with institutional investors who own just 90% of the company, up from under 80% four years ago. INTU shares are trading at around 2/3 of their bubble valuation, with a P/E multiple a little over 22 times earnings, and pay no dividends.
One of the main risks I see for Intuit is that the Federal and State governments all start giving away consumer tax prep software, something that is already happening to some extent. Government might be slow to get it right, but it the end, they probably want to exercise the maximum control possible over tax revenue, and how better than to essentially fill out our tax forms for us? Another risk is that Microsoft is running out of areas to grow in, and the small business that many see as the engine of the American economy are a likely (and stated) target.