Adyen NV (ADYEY)

(A Top Pick Nov 28/24, Up 17%)

After owning for 3-4 years, sold. Seeing encroachment from other players (mainly SHOP) into its European business. Growing its business in US and globally. Not a cheap stock.

Not a household name. Provides the payments and processing backbone for many of our favourite apps and services around the world. Think Uber and Spotify. Uses the same, unified software all around the world. 

Cashflow machine. Topline grows about 20% per year, and about 50-60% of that flows through to the bottom line. $9B in euros sitting on the balance sheet. Stock weak due to higher competition, but that's ending. Good line of sight to revenue growth. No dividend.

(Analysts’ price target is $18.14)

(A Top Pick Apr 27/23, Down 13%)

Very high growth. Big drop last summer from a price war in the payments space. Those fears have abated. Management expects revenues to grow more than 20% over next 3-4 years. FCF margins expected to move from 50% to 65% over next few years. Very strong innovation culture.

Global payment processing infrastructure for companies like NFLX, UBER, NKE. Good exposure to e-commerce. Moving more to brick and mortar, unified commerce. Relatively new company. Software is easy to manage between countries. Fraud rates are better. Best in class product. 

30% revenue growth on top line, market-leading EBITDA margins of 55-60%. Good entry point at 3% cashflow yield. No dividend.

(Analysts’ price target is $16.00)

(A Top Pick Feb 08/21, Down 8%) Company that provides payment processing services. Recent selloff in market negatively affecting share price. Switch of eBay to Adyen software service is a big win. High margin business with 2% free cash flow yield. Still believes is a good company and will keep owning.

It's a European payments business. Payments, beause of the pandemic, have become more cashless.

An EU thin-tech payments service provider. Their platform simplifies things for multi-national retailers as they move more and more into e-commerce. It is one of the few companies where he sees 30-40% revenue growth and free cash flow. (Analysts’ price target is $1759.18)