Jackson Hewitt Tax Service, Inc. (JTX)

FocusOpportunity (22.79) Submitted: 3/07/08 9:53 PM : Start Price: $12.31 JTX Score: 38.62

A rare convergence of events have recently provided investors the opportunity to purchase this above average business at a bargain price. Today's price is just to cheap for this non capital intensive business with above average growth prospects, and a history of using every dime of free cash to buy back stock.

Recent results have undoubtedly been poor, but I see no reason to believe that JTX has suffered permanent erosion in the underlying value of its business. With only a 4% share of a large, growing, and fragmented market, my guess is that 10yrs from today JTX is likely to be both bigger and more profitable than it is today. Although, it will be nice to get paid a safe 5.25% dividend to wait.

Within 2-3yrs I expect annualized returns from todays price north of 20%, if not considerably higher.

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