Opinions
Gordon Reid
Visa Inc.
V-N
COMMENT
Jan 30, 2018
Stock price when the opinion was issued
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Recent struggles are probably due to stablecoin, which is tied to the US dollar. If it can manifest into an efficient system (very low, or zero, transaction fees), could be a threat to V's business. Visa also has the ability to change its fees or to set up its own stablecoin. He's not too concerned, it's really just noise. This is his favourite.
Down 8% off 52-week high, which is normal trading that can happen to any stock at any time. Down 3% this week. As good a time as any to buy.
Global leader, few competitors. Stock's come down to 200-day MA, which is always a good time to dip back in (and he did). He's held this name since 2016, adding when down and trimming when frothy. Revenue for 2026 expected to exceed $44B. Really consistent, very steady growth. Around 13-15% compounded earnings growth ahead. Yield is 0.71%.
(Analysts’ price target is $395.70)She still sees upside and it is one of the best known players in global payments. It has double digit revenue growth and its value added services contribute to more than a quarter of its revenue. Still has high margins. Returned $6 billion to shareholders in buybacks and dividends last year. Has strong fundamentals.
Though he's not a fundamental analyst, he can offer a small insight into the credit industry. There's been a lot of talk that's there's probably going to be some reason for the Fed to ease, and that's because the economy is probably slowing down. Purchases will be down, so Visa and the like will suffer.
That's probably why it's stopped moving up to the same degree as the S&P 500. Looking at the chart, you can see the consolidation pattern; as long as the pattern doesn't break, you're OK. Don't assume anything. If it breaks to the upside, you want to be a longer-term owner. But it could also break to the downside, possibly for the fundamental reason mentioned above. So you need to be cautious on this one. The consolidation could be a warning sign.
Having taken most of my money out, how do I know when to sell my last bit, or do I keep hanging on forever as I’m just playing with the house money? This is really the core of investment management. It's a question every investor and investment manager has to understand, come to terms with, and create a disciplined approach to the answer. You have to have a rule-based investment philosophy to allow long-term success. It's not "house money", it's your money. You should think of your profits, not in terms of the relationship with a cost of your investment, but just in absolute terms. It's your money. It doesn't have any less value because you've earned it in the market. Also you shouldn't just be holding on because it is "winning". You have to always be looking at the company in terms of how is it trading today relative to its past, and what might happen in the future. You have to judge a company every day, asking yourself if it is something you would buy today.