Visa Inc. (V)

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. 
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On his shopping list. Dominant franchise in a duopoly with MA. Fantastic compounders, 10-year compounded total shareholder return at about 18%. Pullback from recent all-time high, on news that under DOJ scrutiny. Pullback is buyable, Visa will escape unscathed. Trades at 27x earnings, MA is ~34x. Discount to historical average of 29x.

Will continue its double-digit growth going forward. You buy these dominant companies on dips.

He's not concerned, because its monopolistic attributes attract this kind of scrutiny. Growth is phenomenal. Getting into other business ventures. Moat is expanding. Still likes it, especially compared to peer options.

Trades at 26x PE which is actually below historic levels. It keeps chugging along. The June quarter grew transactions by 9.4% and growing well internationally, twice as fast as US growth. 

Not concerned if there is a consumer slow down. Ability to generate consistent revenues. Strong brand recognized around the world. Technology allows for increased growth. Ability to generate strong profit margins excellent. Not concerned about regulation in the business - company able to maneuver around this. 

Money-making machine, dominant position, great opportunity. Earnings forecast to grow 12-15% a year for next 3 years. Not cheap at 29x earnings. Doesn't own it, but could. Won't be a world-beater but 12 months out, once the easing cycle takes hold, the consumer should start to improve.

Prefers Mastercard for its higher growth rate over the last 5 years. Visa sees more regulatory challenges in the US and UK, and are more exposed to debit cards which is seeing regulation pushback on those fees. MA is more exposed to European markets where the cash-to-card conversion is still going, offering growth. Both companies enjoy great margins and are layering on extra services. A slowing consumer may slow growth rates from 12% to 8-10% in revenues, a slight, but not major headwind.

The PE has fallen and no longer expensive. Has $19 billion in free cash flow in the past 12 months and will benefit from lower interest rates.

Ability go generate revenues very strong. Technology widely used across the globe. Very high margins and ability to generate revenues. Move to digital payments also good for the business. Very strong "moat" with brand name, and tech stack. Consumers appear to still be strong. Would recommend holding for the long term. 

It's lagged the group over slower consumer spending at the lower end and in China, but Visa expects to increase earnings low double-digits and earnings in low-teens. The trend from cash to credit will continue, and Visa will continue to benefit from e-commerce.