Block Inc (SQ)

SQ-N vs. PYPL-Q. The broader payment processing space is great but he prefers V-N. These are expensive stocks. PYPL-Q has abroad offering so probably the better one to buy. He would say that you should look at the best-of-breed, V-N. Paypal would be the preference between the two, however.

(A Top Pick Apr 17/19, Down 7%) The competition is with the likes of SHOP. They will report earnings tonight. They also provide financing along with collecting transaction fees, where margins are 40%. Ongoing fees have margins of 80%. In the long term, the opportunity remains. He still likes them. His target is $79.

Their software lets retailers take payments, manager inventory and now for consumers a cash app including peer-to-peer transfers. SQ is pricey, but boasts 25% revenue growth--doing well in developing software. Trades at 14x current revenue. If they can execute on their cash app, SQ can move higher. But he prefers Mastercard in the US payments space.

LSPD-T vs. SHOP-T vs. SQ-N. He owned SHOP-T and then sold it and it was a mistake. None of the three companies meet his criteria. They have rapidly growing top line but the bottom line is not where it should be. LSPD-T bought another company recently and the stock price reacted favorably. We don't know enough about their bottom lines to be comfortable with them. These are fairly aggressive positions, especially at these levels. These would not be large allocations but if you wanted a little punt and accepted the volatility then these would probably be okay. SHOP-T would be the leader of the three.

Rangebound? It is not a name he would own. It hit over $100 at one point, but is trading at too large of a multiple for his liking. They have a cash app that allows for an instant transfer of funds between people that he likes. However, there are still transaction costs that give Visa and Mastercard the advantage.