Visa Inc. (V)

Trump wants major banks to open up competition on credit cards. It is not a law yet but if that happened it should be manageable for Visa. It has the largest global network of the four credit card companies in the US. Its operations are scalable and it can pull back on operations, expenses and consumer rewards.                  Buy 42  Hold 7  Sell 0

You have the spin from the government, budget deficits, etc. With a stimulative environment and inflation they get more money since they take a percentage of the increase in prices. History has shown that every time the Mastercard and Visa category gets hit, it's a mistake not to buy. Therefore if there is punitive legislation from the Trump administration, it is time to buy.       Buy 42, Hold 7  Sell 0

Just as with MA (which he also owns), Visa dominates fees charged and, therefore, controls its earnings. Very few players can upend them. Pursuing more technology advances. Visa trades at 27x forward PE, growing at probably 15+%. Very good valuation for a company with only 1 major competitor.

Visa has been weak technically, not participating in recent market moves. Still above 200-day MA today, and that's moving higher. Up 14% in last 12 months, which isn't that bad ;)

Market should broaden out as we look ahead. There are few companies that trade at a discount to long-term averages, but with the same or faster growth than in the past. AI means less use of cash, but also increased velocity of transactions. Same entrenched dominant position going forward. Yield is 0.77%.

His top pick for 2026. Should be a great year for fintech given falling rates and less regulation and AI implementation. A few weeks ago, they announced they would introduce stablecoin via a partnership with Circle to offer global remittances, which charge up to 6% per transfer. A huge market and a great disruption opportunity due to Visa's large user base.  The deal isn't baked into shares.

Has owned this forever. The Circle deal to introduce stablecoin to Visa will boost Visa, with very high margins. The deal isn't baked into shares.

Record holiday spend and amazing free cash flow and a clean balance sheet.

Toll booth payment every time someone uses their Visa card. Bank takes on the credit risk, not Visa. Incredible network. An amazing 64k transactions per second. Ton of people around the world still use cash, so huge secular growth potential. B2B business has great growth. 

Stablecoin and so on are not threats because Visa's involved in all the new technology. 80% gross margins. Yield is 0.76%.

It's been a successful year for Visa the company, but Visa the stock not so much. One reason is that investors are unsure what will happen to economy--will there be a recession and will unemployment spike? The PE has shrunk from low-30s to 26-27x. The fundamental march on, but not the share price. Visa is much larger than Mastercard, trades at a lower multiple and Visa's debit card business is more entrenched. Visa remains the leader. 

He owns Mastercard but both are similar although MC grows a little faster. Revenue growth is doing better at 10 to 12%. This is because of cross border transactions and e-commerce. Although the valuation is a little high you can pick away at it for a long term hold.

Downtrend due to there being a lot of other consumer credit companies that are better on the digital side. They will transition, and he's watching for them to get more digitalized. They're trying, and they do have some offerings. 

Struggling with integrating AI, as is Mastercard. They've implemented it for the betterment of their own business model, but they haven't yet done it for the customer's experience.

Debit will effect them, and this deal is complex. He always says that Visa is a toll booth, charging money whenever a customer uses a card, without Visa taking any risk. Also, there are so many points systems tied in with credit cards, so people prefer credit to debit cards. So, the impact of debit is limited. And Visa is a global player which could grow in cash-using countries. Great cash flow and margins.

Nice run in 2024, now basing. Sub-prime lenders are showing that the consumer is in trouble, and the big US student loan company is seeing more defaults. So Visa will be getting people defaulting on payments, pressure from a softer economy. 

Good news is that it does seem to be holding support quite nicely. Gets a 5/10. Nothing wrong with the chart, just not exciting.

Long term, very positive outlook. Still some growth to go from cash/cheques to digital payments. Cross-border volume and travel has held up pretty well. High-end consumer continues to travel and buy. Bit of weakness with lower-end consumer. Seeing transition to people using cards for everyday items, not just big-ticket ones, and that provides steady volumes.

Adding services such as cybersecurity, a growth area. Pullbacks like today are good entry points.

This year, there have been fears of stablecoins and cryptos displacing both Visa and Mastercard  However, both companies are too entrenched with merchants and customers to displace. There are few incentives for consumers to adopt stablecoin. He continues to buy it.