Visa Inc. (V)

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.

No better credential network to support alternative networks such as stablecoin. So there are risks, but also opportunities. Stock's being left behind as so much $$ goes to the AI trade. One of the most durable companies in the S&P.

Hasn't trimmed. In a portfolio, not all stocks move at the same time. Some take leadership, while others take a breather. Visa's been successful at gaining market share, inflation also helps. Trades just south of 30x PE, and analysts give it 13% growth. A stable hold.

Likes the long-term secular growth. 50% of world's transactions are still in cash. Seeing more cross-border transactions and leisure travel. Few competitors. Underperformed S&P since April, but still OK. Lots of $$ is chasing tech, but this name's up 27% last 12 months. 28x PE for 13-15% growth, a bit of a premium. Still likes.

Has done so well, he took some money off the table as part of good risk management. Long-term chart's performed very well. The kind of name you want in your portfolio. Continues to perform.

Drifting sideways between $325-375 since beginning of this year. Range-bound, not clear if it wants to go up or down. Consumer spending has been resilient, but he's keeping an eye on it. What happens with consumer spending is critical to this name.

To succeed, you have to do the underlying, to sell it at your level, or else you will buy it back at a higher price. A Canadian writing a covered call on a US stock that income treatment is a capital gain, which is good.

Still attractive. Continues to average up into the position. Despite inflation, still gets to participate in the growth of commerce.

Is up only 8% this year, but always buy this on weakness.

Great business, growing secularly. Dominant position in a tight oligopoly. Domestic (40%) and overseas (60%). Expects earnings to continue to compound at ~12-14% pace over coming several years. Competitive moat means not likely to be disrupted. 

Has pulled back about 8%, while equity market is making new highs. One to buy the dip. At ~27x PE, trades at small discount to MA right now. MA is growing faster, around 15%. But trades at 32-33x PE. 

He'd be fine with buying either one or both for the very long term.

It is a great company and the key benefit lies in the transition from cash to credit. They are adding more add-on services but it has under-performed the S&P 500 for the past few years. It is stable but not accelerating so there are probably better opportunities elsewhere.

He owns Mastercard but they both offer low risk and attractive returns. Visa and MC are a duopoly. Long term, Visa has done better than lately but it shows growing its top line by 10 to 12%. 

Though he's not a fundamental analyst, he can offer a small insight into the credit industry. There's been a lot of talk that's there's probably going to be some reason for the Fed to ease, and that's because the economy is probably slowing down. Purchases will be down, so Visa and the like will suffer.

That's probably why it's stopped moving up to the same degree as the S&P 500. Looking at the chart, you can see the consolidation pattern; as long as the pattern doesn't break, you're OK. Don't assume anything. If it breaks to the upside, you want to be a longer-term owner. But it could also break to the downside, possibly for the fundamental reason mentioned above. So you need to be cautious on this one. The consolidation could be a warning sign.