Visa Inc. (V)

Credit card companies are delivering exceptionally well. If you want a play on the global economy, there is no better play than the credit card companies.

Great business and benefiting from the overall pickup in the US and global economy. More importantly, the huge increase we are seeing in online shopping with people using credit cards is a huge benefit for them. Not cheap. Trading at 2X earnings.

Likes everything about the story except the price. This says something about the underlying strength of the global consumer. Expects that over time this will gradually move higher. Wait for a dip but that may not happen and you may just have to hold your nose and Buy.

Looked at this along with MasterCard (MA-N) and American Express (AXP-N). Of the 3, as a potential purchase, he chose American Express which has good growth. All 3 companies will do well in this better US economy. Wasn’t prepared to pay the P/E ratio on Visa. If you are a trader, he would suggest perhaps taking half off the table and switching to American Express.

Almost 60% of their business is debit cards and debit transactions are climbing. There is no credit risk for this company. As we move globally towards a paperless society and use electronic means to sell transactions, this is going to do well. Yield of 0.82%.

An incredible story. A tollbooth in the credit card industry. Have no credit risks. Hard to buy it at this price.

Has had a terrific run. If he is correct about the US economy growing, that means more transactions and this company will make more money. The new technology, where you can use your smart phone, presents both challenges and risks for credit card companies. Feels the banks are going to find ways to bring that business in-house and separate from Visa and MasterCard (MC-N) and try to capture those transactions for themselves.

One of the greatest companies in the world. No one can break into this. All the banks take on the credit risk. He can’t buy it because of the crazy multiple. It will continue to benefit.

All the market will go into Visa or Mastercard. His concern on both is that they are pricy. $110 model price on Visa, -10%. On any model price, look for $128. That is where he would enter it.

It is not trading at an excessive multiple. Credit cards are becoming a bigger and bigger part of their lives. Some growth internationally and in North America. Buy it on a pullback. Regulatory issues regarding charges are not going to be as bad next year.

(Market Call Minute.) Likes both this and MasterCard (MC-N).

Quite an exceptional story. Every time he is interested in buying on a pull back, it doesn’t pull back. No credit risks. In effect it is a tollbooth in credit cards. Have lots of chances to grow internationally.

(Market Call Minute) Wrong part of cycle.

(A Top Pick Oct 24/11. Up 46.96%.)

Both Visa (V-N) and MasterCard (MA-N) are terrific in terms of their dominance. We are moving towards a more credit card oriented society. 20X earnings and a limited dividend keeps him on the sidelines for both of these stocks.