Shares of Jackson Hewitt Tax Service Inc. (NYSE: JTX) jumped more than 20% in today�s trading. The small cap stock reached a high of $1.98 in trading. At last check, it was up 19.25% to $1.92, with volume up from daily average of 1.66 million to 3.09 million. New Jersey-based Jackson Hewitt has a nationwide network of franchised and company-owned offices that provide computerized preparation of federal, state and local individual income tax returns in the U.S.
The small cap stock spiked in today�s trading after Jackson Hewitt reported its preliminary tax filing results for the fiscal year ending April 30, 2010. In the fiscal year, the company, through its franchised and company-owned offices, prepared 2.530 million tax returns. In the prior fiscal year, the company prepared 2.955 million tax returns. Although year-over-year prepared returns declined, they were up compared with a previous guidance given by the company. This was due to a better-than-expected performance in the second-half of the tax season.
Commenting on the preliminary results, Harry W. Buckley, Jackson Hewitt�s CEO and president, said that the 2010 tax season was disappointing. Buckley attributed this to headwinds from a soft economy, high unemployment, competition, and RAL product. He said that the company is firmly focused on the future.� He said that in order to improve results in the 2011 tax season, the company and its franchisee representative are working toward completing a detailed strategic business plan. The company has also intensified efforts to identify a resolution of the RAL product issue. Buckley said that the company is looking to optimize the opportunity presented by an exclusive agreement with Wal-Mart (NYSE: WMT).
Despite a decline in returns prepared, the small cap stock spiked in today�s trading. This may have been due to better-than-expected results reported by the company, which signaled that the company benefited from an improvement in the economy in the second-half of the tax season. And as the economic recovery continues, the company can expect a stronger 2011 tax season. Investors seem to have taken notice of this, driving the stock up in today�s trading.
The small cap stock has a 52-week range of � $1.46-$7.58. Currently, it is trading above its 50-day and below its 200-day moving averages.
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