Visa Inc. (V)

This would be a good time to enter. This is a provider of an electronic platform for financial institutions, who want to have payment systems related to debit cards, credit cards, prepaid cards, etc. This is a transaction business, so the more transactions, the better. Looking at the growth in emerging markets, it is more of a secular story as market penetration is no where near what it is in developed markets.

Hit hard during the Ukraine/Russia crisis. Now it is in the market that Russia will develop their own network. Visa is a play on the move to a cashless society. 37% of payments are still cash in the developed world. In the developing countries it is 57% so there is a lot more room for non-cash payments to increase. Visa is the largest and has the lowest cost infrastructure and competes most effectively.

A great company and has done very well in the last 3-4 years. If you want to own this, he would take a really small position. If the current litigation goes against them, then you might add more. Growth has been good and this is well-run.

He added it recently as new positions for clients. He likes the story. Hold on long term. The second half of the US recovery will benefit this one.

This company has a tremendous profit margin and a huge moat around its operations. It’s accepted around the world and keeps growing. Throws off cash like crazy. Yield of 0.72%, and there is huge room to grow the dividend.

If you are going to be in this space, this would be the one you want to be in. These companies have such a big infrastructure that it is hard to find a fault. The biggest scare is for merchant fees to come down and/or alternative payment systems. Thinks this infrastructure will continue for a long time. Not cheap. Multiples are way above market multiples, and if they did stumble, this would have a material impact on the stock.

Recent addition. Stock has not participated in the rally. Valuation is more attractive than MasterCard. 57% of payments are cheques in developing countries vs. 37 in developed countries.

Tremendous growth story. This is obviously one that you want to look at as consumer confidence grows globally and consumers take on more debt. Has been a major driver of profitability. Recently had a bit of a hiccup because of what is going on in Russia but doesn’t think this will be a longer-term issue. Trades at a fairly healthy PE multiple of about 24X. You want to give some consideration to a lot of innovation taking place in new payment systems and pipes of payments systems. If new technologies start reducing fees on transactions, that is a longer-term concern of companies like this.

She was hesitant on the valuation and this last quarter there was slower growth, but the valuation is still a bit too rich. She took profits and does not own MasterCard either.

Has some technical support at about $205, which is about where the company is right now. However, looking at its FMV, he can’t give you any further upside. He would go elsewhere, such as Discover Financial (DFS-N), which is trading up much better value.

The financial technology sector is one that looks very attractive. The cards are a great long-term play on growth in transactions globally. This is not going to stop. (See Top Picks.)

This is an area that you want to be in. We are moving more and more to a paperless money society, and there is still plenty of room for them to grow.

Has done very well over the years. About 60% of their business is now debit card business, a very big growth area. Internationally, the move towards plastic is a number of years behind where we are in North America and international sales are about 45% of total now. There is a long way to go and this is pretty predictable. It grows at about 20% per year.

(Market Call Minute) Pulled back nicely. Good sector. Prefers some other areas in financials, however.

Wouldn’t want to bet against this company. Has a very premium valuation trading at about 23 or 24 times earnings, so you are paying a steep price to Buy. However, you can’t argue with the success they have had. Payment processors are benefiting from 2 big long-term trends, a move towards a cashless society and the proliferation of e-commerce.