Gordon Reid Visa Inc. V-N TOP PICK Jun 17, 2025

Every time he's trimmed the stock, it's been a mistake. Great example of the power of network effects. Though penetration is high in developed markets, it still delivers decent sales growth and low double-digit earnings growth. No reason for the story to imminently change. Value-added services (such as security, analytics, loyalty insights) are growing at multiples faster than the core business.

Another of the best in the world with a great business model. Getting into so many areas. Sky's the limit. Economic downturns will affect earnings, but long-term runway and tailwinds are intact.

It owns the technology that processes transactions so it is basically a tech business. However it is very expensive with P/E in the 30 times range so you have to believe they're going to grow. It is a solid business and inflation actually helps them. There are disruptions in the payment space which are chipping away at Visa's moat. Change is coming but how fast - this will affect growth in their business.

The Wall Street Journal reported that some retailers are looking at exploring the possibility of using stablecoins for customer purchases as an alternative to credit cards. We would not see this as a big threat, and would see the dip as a chance to buy.
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All credit cards are down 4-5% today on the stablecoin report. Stablecoin has been around, and PayPal has its own. Think about how long it will take in terms of regulations for Walmrt and Amazon to get into this businesses. Also, consumers like to wrack up credit card points. Stablecoin is a long way off. VA and MA are super companies. This is an opportunity.

Has owned both for a long time, but are trading near all-time highs, so this isn't the entry point. Wait a little. This as is expensive as they get in terms of PE. They are hard to dislodge, despite the threat of stablecoin. 

It still holds a dominant position in world global payments and is still a long term hold with good execution. It trades at a bit of a premium.

He owns Visa and owned MA a long time ago. Both are great, but he prefers Visa. Visa trades slightly cheaper in terms of valuation, and is much larger than Mastercard (Visa is bigger than all competitors combined). MA is more internationally active. Visa has a higher percentage of debit cards, which grows faster than credit cards. Visa competes well in terms of growth rates with MA, yet trades at a lower multiple, so cheaper. He likes that the debit card business is growing faster than credit cards.

Yes, stablecoin has been weighing on Visa, but he thinks also the Middle East fighting between Iran and Israel. Airlines cancelled flights, so there was concern over credit card spending. Is down 3% today. He target $365.