Ian FungVisa Inc.VBUY ON WEAKNESSFeb 21, 2020

He owns Mastercard but not Visa. However they are both crown jewels in the market and good to buy. The rise in Agentic commerce and digital currency could be a concern but they have strategies o deal with it. The valuation has come down with multiple compressions.

Continually increases number of transactions. Beneficiary of modest inflation (hyper-inflation causes less spending), as it gets paid on the dollars spent. Very attractive multiple ~24x PE (historically it's ~30x). Yield is 0.81%.

He's out. Momentum has broken. Price is now below 200-day MA, and that's rolling over. Secular growth drivers are still there, for about 14% earnings growth at 23x PE. But it's more about valuation right now. If you think of it as technology, investors are seeing a lot more exciting names out there.

When technicals improve, he'd look at it again.

They reported a strong quarter with 9% volume growth. People are spending. Even if prices rise, Visa still makes money. Other areas are growing and amount to 30%, such as merchants hiring Visa to do marketing services cybersecurity fraud prevention. Also, there's room to expand to many parts of the world still using cash.

Owns this instead of MA because of the broader offering (including Europe). Net beneficiary of inflation. A category to buy on weakness, but only as it applies to V and MA for their quality (he doesn't like any of the others).

Buybacks, dividend increases, solid performer.

Still one of the cleanest business models in global markets, and one of the most powerful. No credit risk; simply sits at the centre of global commerce and collect fees on each transaction. Still in a shift from cash to digital payments. 

Double-digit revenue growth, earnings ahead of expectations, continued resilience in consumer spending. Even in this time of uncertain economic risk, payment volumes remain strong and that highlights its durable business model. 

High-quality compounder, scale, pricing power, long runway for growth. Ranks 10/10 on fundamentals. Yield is 0.81%.

Grows revenue at 12% clip, and EPS faster than that. Unlevered balance sheet. Trading at 10-year low on valuation. Despite perceived threats, every right to win in the agentic world. 

At worst it will be AI-neutral, at best AI will be incremental to the runway. As movement of $$ increases, Visa tends to get paid. There is real risk from the interbank clearing system, but there's no better place than Visa if you want credentials and high levels of trust. Yield is 0.85%.

Theory is that with agentic AI, we don't need V for payment rails anymore. For the past decade, has grown at 10-11% on revenue and that's expected to continue. Trading at a discount to its history, yet business is as robust as ever. Long-term hold. Yield is 0.90%.

One of two dominant players in the space. Considered more international. Credit card companies actually make a vast amount of $$ on the foreign exchange for transactions.

Mastercard is growing slightly faster but Visa is more popular. 16% growth for MC and 12% growth for Visa. People are traveling more and when they cross borders this means lots of money for the two companies. It has been impacted by the AI fears. Hold at these levels.

Price is bouncing around due to profit-taking and market volatility. Somewhat tied to the US dollar. Incorporating stablecoin, which should propel it going forward. Keep holding. Prefers V to MA.

Are worries that the economy will crack and the consumer is weak, but data does not support this. Visa transactions are growing 7-9%. Their PE has re-rated lower, historically.

Likes Mastercard a little more, but likes both. Periodically, they sell off. They are cyclical in terms of the market loving and not loving them.