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5-Star Stocks Poised to Pop: Intuit

By Brian D. Pacampara, CFA – Updated Apr 6, 2017 at 11:17AM

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Market-trouncing returns could be written in these five stars.

Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, accounting software specialist Intuit (Nasdaq: INTU) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Intuit's business and see what CAPS investors are saying about the stock right now.

Intuit facts

Headquarters (Founded)

Mountain View, Calif. (1983)

Market Cap

$12.8 billion

Industry

Application software

Trailing-12-Month Revenue

$3.45 billion

Management

CEO Brad Smith (since 2008)
CFO Neil Williams (since 2004)

Return on Equity (Average, Past 3 Years)

21.2%

Cash/Debt

$1.9 billion / $998 thousand

Competitors

H&R Block (NYSE: HRB)
Jackson Hewitt Tax Service (NYSE: JTX)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 94% of the 487 members who have rated Intuit believe the stock will outperform the S&P 500 going forward. These bulls include CalEarthquake and measax.

Just last month, CalEarthquake tapped Intuit as an ideal way to earn some free cash:

Focus and deep knowledge of their customers along with advanced web 'cloud' implementations of products mean growth. Free Cash Flow allows either stock purchase or continued targeted company acquisitions. Don't expect Dividends. Intuit has better ways to invest your money.

Intuit's market-share dominance, high customer switching costs, and strong secular tailwinds fuel our community's high opinion of the stock. As the trend towards low-cost, do-it-yourself tax preparation has grown over the past several years, Intuit has steadily taken market share away from traditional preparers like H&R Block and Jackson-Hewitt. Of course, with Intuit and giant Microsoft (Nasdaq: MSFT) merging their respective cloud platforms earlier this year, Intuit's future growth prospects don't seem too shabby, either.

CAPS member measax elaborates:

Intuit is delivering great results on its core products (Turbo Tax, Quicken, QuickBooks), but is also expanding into new horizons that have is poised to be the financial software giant for generations to come. Besides being the market leader in personal finance (online and desktop), tax, small business and accounting professional software, Intuit is also the third largest "cloud computing" company, largest small business payroll provider (which has lead to a promising new jobs report for economists), and has scores of new applications for desktop, mobile and web.

What do you think about Intuit, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Microsoft is a Motley Fool Inside Value pick, and Motley Fool Options has recommended a diagonal call position on it. The Fool's disclosure policy always gets a perfect score.

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Stocks Mentioned

Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$237.45 (-0.20%) $0.47
Intuit Inc. Stock Quote
Intuit Inc.
INTU
$395.80 (0.47%) $1.83
H&R Block, Inc. Stock Quote
H&R Block, Inc.
HRB
$42.32 (-3.42%) $-1.50
Jackson Hewitt Tax Service Inc. Stock Quote
Jackson Hewitt Tax Service Inc.
JHTXQ

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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