Visa Inc. (V)

(Top Pick Aug 19/14, Up 37.23%) In developing markets cash and cheque is 55% of payments. More markets are moving toward more electronic payments. They get paid by transaction volume and by their size, which are both growing.

Likes a company that is protected from competition by a moat. Very few companies that are protected like Visa. He thinks they have unbelievable potential growth especially in Asia. Terrific business even at this price.

Finds this is relatively expensive and you can find better value in the market right now. As a long term holding, it has been a terrific franchise for people. It wouldn’t be his 1^st choice.

Visa (V-N) or MasterCard (MA-N)? He feels this one is the bigger and the better of the 2. MasterCard has a bit more of a technological change going for it, but this one is the bigger size. Both are priced to perfection, and he questions if that growth is going to be able to get there. There are a lot of potential disruption coming with PayPal and Apple Pay. If there were to be a pullback, both companies would pull back quite substantially because their multiples are so high.

A transaction company and transactions are growing internationally at 10%+, domestically and in Canada in the high single digits. They are able to grow their earnings at the 18%-20% annual rate. Not an inexpensive stock, but certainly the growth supports the valuation. Have a couple of things coming up that are exciting. They have the Olympics in Brazil as well as FIFA in Brazil. Both of those are sponsored by this company, and there is always a very big uptick in terms of transaction growth when advertise through these mediums. Dividend yield of 0.67%.

(A Top Pick July 8/14. Up 31.03%.) Still likes this. Had bought this because of the secular shift on electronic payments. They have a very low cost infrastructure base, which is going to be important as electronic payments in general get more competitive. In emerging markets cash and cheques still account for over 60% of transactions, whereas in developed markets it is closer to 30%-35%, so there will be a lot of growth in emerging markets.

Stock has been on fire for the last 4-5 years, and thinks we are still in the early stages. It still has lots of upside, primarily because of the move away from spending cash and going to plastic. As much as it has happened in North America, globally it is still quite young and there is going to be much more of a move in that direction in the coming years. Also, are in bed with Apple Pay, which is in the very early stages. Trading at around 30X PE. Prefers this over MasterCard (MA-N). You have to be willing to accept some volatility and that you are not going to get paid much of a dividend.

Visa (V-N) or CitiGroup (C-N)? From his perspective, he would say Citigroup because it is probably a better investment at this point in time because a) it is much cheaper from a multiple perspective and b) this one has a much higher multiple. This has been a phenomenal stock.

(Top Pick Jul 14/14, Up 23.34%) It has to do with China where there is a huge upside. There is a worldwide under penetration of credit cards. They are the biggest and at the time he bought it the price was the best. He still thinks so.

He has been a long term bull on V-N and MA-N. Like the Dow, it has been struggling all year. The risk for the next couple of months is to the downside. You want to be a buyer in the low $60s on market pullbacks.

A way to play growth in the economy. Prefers this one to MasterCard and Discover.

(A Top Pick June 26/14. Up 32.98%.) A transaction company and doesn’t have any credit risks. 55% of its transaction business is now done outside of North America, which is a very strongly growing area. 60% of the business they do is debit cards, the sweet spot of where society is going. Growth rate continues to be very fine. Organic growth rate is about 20%.

Not a cheap stock. To buy it, you have to believe that the runway of growth is long and wide, which he believes. More people are going to be using credit cards in both existing and emerging markets for the long-term. E-commerce is only 6% of all retail revenues in the US. The company is spitting out tons and tons of cash flow and buying back stock. There is a rumour they may finally merge with Visa Europe.

(Market Call Minute) Terrific long run along with MA-N. It has exceeded its fair market value by 25-30%.

Likes their long term outlook. The US economy has not been doing very much this year, and these large cap names are somewhat a reflection of that. Believes electronic payments is a secular growth trend going forward and this company is very well positioned. Expects anywhere from 10% to 15% upside a year from now.