Visa Inc. (V)

(Market Call Minute.) The valuation is very high and the payments network environment is going through a significant change right now.

What the merchants in the US and Canada pay Visa and MasterCard (MC-T) are vastly different than what they pay in Europe and Asia. We pay much higher fees which hurts the consumer. Longer-term these rates to have to come down, one way or another. He would be cautious right now until we see how this unfolds. Doesn’t thinks it is going to end well for the banks and Visa.

Just did a deal with Costco in the US to be their new credit card provider, displacing American Express. This company does more transactions than MasterCard, American Express and Discovery combined. Very much a growing company. Lost the Walmart Canada account, because of high fees. However, volume trumps everything. Acquired Visa Europe for about $20 billion, which is going to be quite accretive.

MasterCard (MA-N) or Visa (V-N)? Both are growing. She prefers MasterCard, although this one has a more dominant market share. To her it is trading a little rich. It also did an acquisition with Visa Europe. In theory that should add a little more growth, but thinks it has been overblown and MasterCard is a safer bet.

Chart shows a long upward trend channel and it should work higher. There is no sign this is going to go down. Feels the stock wants to go higher. However, if your portfolio is loaded with consumer sensitive stocks, then you have to lighten up. Consumers type stocks have gone too far and too fast. He would prefer to be underweight consumer stocks, and would lighten up.

Recently had a little uptick. Had added to his holdings during its February lows. Very strong operating margins. The whole Visa Europe acquisition has been probably one of the major things holding this back. In the very, very long-term, we are going to hear dialogue about not needing credit card companies, as we are all going to transact on our phones using text messages, etc. Thinks that is a long way off though.

Seasonally this tends to follow the same tendencies of the consumer discretionary sector, which tends to run from October all the way to the beginning of May. We are now past the period of seasonal strength. Technically it looks quite healthy. Resistance is at $81, and is not too far away. You want to see this break out or break down before taking a position.

This rules the world. In the US, there are more people working, gas prices that are still low, and he thinks there will be a heck of a travel season this summer. That is all good news for Visa.

This has been a great stock and has done very well over the years. They are buying Visa Europe, which is a terrific purchase for them. They do more business than MasterCard, American Express and Discovery combined.

(Market Call Minute.) A very good solid, long term franchise. This would be a Buy at the 52-week low.

A powerhouse. It is such a good business, and one where you have structural advantages in terms of taking volume from other forms of payment. While there is some pressure in terms of some top line pricing, they can add value added services. In this company specifically, you have the added advantage of Visa Europe getting lumped in. Pretty fully valued.

They are a company you don’t want to bet against. More and more people are going to paying for everything with a credit card. It is not a cheap stock however.

This falls in the consumer discretionary space which tends to be more volatile. Seasonal trend probably runs from the start of October all the way through to May. The chart shows a head and shoulders bottoming pattern, which it broke out of. There could be a bit of room left in that, but if looking at the broader market rolling over and a Sell signal, you might not want to be too aggressive in accumulating or holding this.

He likes it, but wait before you accumulate more or buy back in. It just hit a new high in November. There may be resistance there. He loves the business. Long term it is a good company to own.

(Market Call Minute.) He is really positive on this company. This is a leader in this payments space. Expansion into Asia is positive.