Visa Inc. (V)

Having a decent day today in the face of tariff threat. One reason is that, if you look at its business, it's somewhat tariff-proof. Another reason is that money has to go somewhere. So if investors are net sellers on an impulse call, such as tariffs, where does that $$ go -- financials and healthcare are possible havens.

Gotta love the digitization of the world with electronic payments. Lots of up-and-comers will provide competition. Yet it's managed quite a strong hold in the space. Overvalued, time to sell. Market leader. He'd be all over it around $250-275.

Deregulation should help. The only downside is that regulatory deregulation can often lead to big hiccups in markets, as in 2007. 

Makes money every time people travel. Since Covid, retirees have been breaking out. Perfect cash cow. Picking away at it for new clients.

They're all good, but this name is the most profitable because it has the largest payment network. Shareholder friendly, increasing dividend and buying back shares. Don't have to spend a lot to improve infrastructure. Valuation at high 20s or low 30s PE is rich.

Outlook is still favourable. Taking advantage of spending in the electronic world. Fundamentals will still do well. Forming partnerships with other companies furthers integration in the digital space. Decent runway, though you may want to wait for a pullback to enter.

See his Top Picks.

Still buying, though not as cheap as a year ago, but it's a unique business that offers double-digit growth. It's a fintech company that collects money with each transaction (i.e. with Apple Pay). They enjoy a duopoly. Slightly prefers this over Mastercard for Visa's innovation, though likes both.

Trades at 30x earnings, but it's warranted. Part of a duopoly, and has branched out into analytic services from its core business. Benefits from switching from cash to digital. Huge moat. There will always be regulatory risk. Happy to hold.

Predictable business model. In a Republican administration, anti-trust stuff should be less difficult. We'll see how consumer spending goes. Travel has been pretty strong. Less economically sensitive. Great holding.

They beat top and bottom. They have a moat and never miss. European volumes are 141% of 2019, and emerging markets are up 21%. AI reduced fraud by 15%. Are up only 13% this year, so there's more catch up to come.

It's not cheap and shares get weak in a market downturn. However, the world is going digital in payments. Visa has low credit risk, because the banks are lending the money (Visa takes a transaction fee). Buy in dips. Is good for the very long run. Maybe other digital pay streams will eat into their market share, but maybe not for a long time.

It's the largest fintech company in the world. Trades around 25x PE vs. historic periods around low-30x. A consistent earner, and Visa consistently grows credit card transactions which leads to profits.

Trades at 17x PE, so he's waiting for a pullback. A great, long-term stock.

Every time there is a recession they target credit card companies so it becomes an opportunity to add. It has a modest but increasing dividend. It has a broader geographic exposure. He prefers Visa over MasterCard, as well as American Express with its balance sheet risk.

Regulatory issues on debit may affect how it does business, but this globally diversified company can manage it. Tactical opportunity to buy more and average into a compelling, long-term opportunity. Reasonable market multiple. Benefits from cash-to-card and push payments. Yield is 0.8%.

The US DoJ has filed a antitrust lawsuit against V, accusing it of monopolizing the debit network markets. As a result, V could see increased scrutiny and potential fines. The DoJ has also filed antitrust lawsuits against AAPL recently, and MSFT decades ago. 

We feel the most likely outcome is that V will agree to pay fines, but the process can be lengthy, and given its strong market position and robust balance sheet, we would view these pullbacks as good long-term buying opportunities. 
Unlock Premium - Try 5i Free