Visa Inc. (V)

This has been a winning rock star in terms of share price appreciation. There is still lots of upside. He wants companies with a minimum dividend of 1%, so he doesn’t own this company. Trading at about 28X PE. Their acquisition of Visa Europe was key. The consumer in Europe still uses considerable cash. He would suggest you take a half or quarter position and just be patient, and try to build a full position over 6 or 12-month period.

Technically speaking, this is a technology name, but probably acts a little more between a technology name and a financial name. The long-term secular move is away from cash and cheques, to plastic. This continues to make new highs. Currently trading at around the 50-day moving average. Look for small dips to add to your holdings.

Financials is a core theme for him. He likes the large US banks and regional banks, the asset managers, capital markets companies and really likes financial technology companies. If rates start to move higher, it is possible you could get a little better performance from the banks themselves, but as a long-term secular theme, financial technology is going to continue to be in favour.

This has never been a cheap stock and never will be a cheap stock, because the company compounds capital at a significantly high rate. Generates terrific earnings growth and high ROE’s. Thinks it will benefit from higher interest rates. In 3-5 years you are going to be very happy to have owned this stock.

TSLA-Q vs. V-N vs. FB-Q. He likes both V-N & FB-Q. V-N is a major player when it comes to transactions. FB-Q would be his favourite tech company. They own the world. They are a very innovative company. They have made great acquisitions. TSLA-Q he goes back and forth on. He is a believer in electric vehicles, but does not think that much of TSLA-Q. Every study shows there will be a lot more electric cars on the road in the future.

This has very strong seasonal characteristics from around the end of January right through until early May. Technically, this is outperforming the market and has an upward trend. A lot of the other US financial service stocks have come under a lot of technical pressure in the last little while. It is kind of vulnerable, overvalued on a technical and seasonal basis. Stick with it until you start to see signs of technical weakness.

He likes this a lot. The secular shift of global payments from cash will continue, and he thinks it will continue long-term. There are lots of markets for them to get into. A lot of the world’s population is still using cash, so there is a long runway for this company. There are also huge barriers to entry for this space. Feels it is a bit overbought at this point at 68 RSI, so you might want to wait for it to come down to the 50-day moving average, at $90-$91. You will do well regardless of what price you buy that.

MasterCard (MA-N) or Visa (V-N)? Either of these would be good. They trade at multiples that are generally significantly higher than market multiples. Both companies capture the payments, and the threat of fees going down is low. MasterCard has a little more international exposure, and is a bit more advanced on the technology side, but this one is the dominant player.

Just bought Visa Europe, so it’s a more complex company now with FX and currency head/tailwinds. You are paying the same price as you would for MasterCard (MA-N), but you are getting more growth. Dividend yield of 0.7%. (Analysts’ price target is $103.)

He loves this company. It doesn’t take any credit risk. This is a toll road. If you want to use a credit card, you have to pay a toll. The great thing about this company is that it only has toll gates on about 20% of the roads in the world. It essentially has no penetration in Asia, and the potential is absolutely enormous. They are now in Europe.

This is a transition from cash and cheques to online payments, in particular in emerging markets. There are still a lot of emerging countries that are not using much in the way of credit cards. Even in North America there is still room to grow. They just acquired Visa Europe, which is expected to generate more profits going forward. She is not buying this for new clients, and is hoping to be able to get in at about $90.

He uses 2 different Stop Loss systems. One just went off today, and another one is still below price at $91.03. If it can hold the $91 range, you probably could add to this. The chart has a nice long upward trend. If it breaks the $91, you are going to have very good support at around $87. A pretty good risk/reward for something he thinks is going to go much higher in the next 8 months.

(A Top Pick Jan 27/17. Up 10%.) Reported very recently and the inclusion of Visa Europe was in that, which was somewhat of a catalyst. Moving forward, the volumes in Europe are going to increase. Thinks this is a long-term structural growth story. Still a Buy.

(A Top Pick March 23/16. Up 26%.) This, along with MasterCard (MC-N) is really taking over the world in terms of converting everyone from cash to plastic. A couple of things that are really helping are its dominance in the debit card world, and the purchase of Visa Europe. Europe is a very, very big opportunity for them. Europeans spend more of their transaction dollars in actual currency as opposed to cash.

He has no reservations as to having it in a core holding, but he missed it. You want a toll collector for financial transactions. They have a pretty substantial network. It is a financial technology company with an exceptional portfolio.