Visa Inc. (V)

Clear path on profitability.

Opening up the market for other credit cards outside Visa/Mastercard not a concern.
Tremendous company with excellent brand and value proposition.
Would recommend holding for the long term.

The payments sector is one you want to be in, and this is his favourite. Though regulatory concerns exist, Visa is the largest payment network and the most profitable.

Participated in this rally. Visa benefits whether consumer buys goods or services. Payments volume is larger than MA's. Growth trend from cash to digital payments, plus e-commerce growth will continue. Yield is 0.74%.

Fundamentally, it's worthwhile to understand that Visa is the granddaddy of the card business. It does more transactions that all competitors combined. 60% of business is international. More of a footprint in debit cards. Prefers Visa at a few multiple points cheaper. Potential of high $8 or low $9 EPS for next year.

He doesn't dislike MA, very similar structures and business plans. It's done well.

People will continue to swipe and Visa got added to the XLF. Earnings will continue to rally until financials report in two weeks.

We don't have a 'internal thesis' on Visa, but the general thesis is that a large amount of transactions done need to go through the 'infrastructure' of either Visa or Mastercard. Also, companies need to accept these cards because not doing so could mean that customers are unable to actually buy good/services from that store. So, they also have some scale advantages due to their market share. 

Fundamentally, they are very solid with 50%+ net margins and tend to grow the top-line at a consistent 10% annually. At 24X forward P/E, the shares might not be 'cheap' but we don't think it looks like an egregious valuation either. 
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It's really a technology company, not a credit card company. A platform for many companies in the e-space.

Tremendous recovery on fundamentals since Covid, yet the stock's gone nowhere on worries about regulation and competing payment structures. He still sees double-digit growth of 10+%. Very attractive valuation.

Toll booth, no credit risk. Recovering from pandemic downturn in travel. B2B is growing rapidly. On cutting edge of mobile environments. No one can duplicate processing power. Lots of international growth from remaining cash transactions. Yield is 0.81%. 

Cross-border travel is a big component of revenue, and this will continue. Fees are coming under pressure, but it's a toll booth. Not a ton of overhead. Once the payment networks are in place, very hard to get off. Trend is away from cash. Increased fraud management and security alerts help solidify loyalty to the ecosystem. Yield is 0.8%.

Does not own shares in business.
Very strong network effect.
Prefers Mastercard.
M&A strategy very strong.
Good long term investment.

Benefiting from pickup in travel. Initially bought it for the long-term secular shift from cash to digital. Thesis still intact, lots of runway around the world. Cross-border travel is increasing. Slowing volume in NA, but still anticipating double-digit revenue growth for Q2. Still benefits when people use it to buy essentials.

Owns shares in the company.
Believes prospects for company are excellent.
Product used by huge amount of population.
Strong management team.
"Cashless society" will benefit credit card companies. 

No credit risk, just a tollbooth. Good growth globally, as lots of people still use cash. Travel is increasing, which is important to Visa. Great B2B growth. No one yet has been able to copy its payment system. Yield is 1%.