H&R Block (HRB) Still Targeted by Shorts

While H&R Block (NYSE:HRB) has made a nice move so far in 2011, increasing 17 percent so far in the strongest part of the year, shorts aren't convinced of the long-term ability of the company to sustain growth or past levels as software solutions become the desired way of doing taxes for a growing number of businesses and people.

Goldman Sachs wrote in a note to clients, “HRB is rapidly losing market share in the tax business to software based solutions,” they said, "and the $84B in mortgages HRB originated during ’05-’07 also pose significant mortgage putback risks.”

The 17 percent boost in share price in 2011 is attributed to "an epic short squeeze, according to the Wall Street Journal. "Stock out on loan — a proxy for short interest — for the nation’s biggest tax preparer had surged to recent highs in early February, but in the face of the rising stock price, H&R Block disappeared from the list of short interest highs that we get from Data Explorers each week," the Journal added.

H&R Block was trading at $14.55, down $0.02, or 0.14 percent, as of 12:41 PM EST.