Visa Inc. (V)

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.

Visa (V-N) and MasterCard (MA-N)? The great thing about these is that they are not taking credit risks. They are a processing system and get their fee each time people use their card. Which one you buy would depend on which one you think looks cheaper.

This is a 30X earnings company, but they have such an amazing moat around their business. Even the new Apple Pay is forced to use Visa. They are delivering a 10%-15% earnings growth. He can’t buy it just on valuation. Probably has a long term 10% earnings growth ahead of it.

A story that he regrets missing. It is a toll booth essentially. They take on no credit risk. Apple-pay is done through Visa. It is in great shape. It is a very international company relative to MasterCard. When you had a pullback you should have bought the stock. There is a lot of growth and that is why people are happy to pay the higher multiple.

This is very tied into consumer spending, and the stock is a little expensive based on the fact that consumer spending, especially in the US, hasn’t been as robust as people had hoped. Americans have been holding onto their money and doing the prudent thing of paying down debt. It doesn’t help this company when the consumer is not spending. Long-term it is a great stock to own, but in the near term is probably due for a correction.

Their business is continuing to grow around the world and they have lots of opportunities. This is a growth company.

This business is on fire. More and more people every day are using credit cards as opposed to cash. This quarter probably won’t be so hot because of currency translations. Great business. He wouldn’t be aggressively adding to holdings, but would buy on pullbacks. Likes this better than MasterCard (MA-N).

General Electric (GE-N) or Visa (V-N)? This is a credit card company that trades at a much higher multiple. They don’t take on any debt, but instead they are a toll booth. Between the 2, he would probably pick Visa because it is a much better longer-term growth story.

Discover Financial (DFS-N) or Visa (V-N)? Visa has a much stronger earnings profile, and given the fact that the technicals are looking a bit rough on Discover, he would choose this one.

This company will benefit from mobile payments. The only problem is that this is trading at a very high multiple. This would be a wonderful candidate if you saw the market come off in a correction. If you have a longer-term perspective, continue to hold.

Not an inexpensive stock, but it is a high growth stock and a very predictable company. A transaction-based company. A lot of people think they have credit risks but they don’t. They basically get paid on the number of transactions. They are in the prime spot to benefit from the move to electronic payments.