My First post here. Hello from Canada! Hard to find a place up north to talk about US Stocks. hoping I can learn a bit from you guys down south What do you guys think about Visa vs. MA. I'm a bit baffled by the recent market action with Visa. It seems like it sold off a bit on the bad news from MA, but the results that I looked at showed Visa hitting it out of the park! I know that the valuation on Visa is a little high, but Its a best of breed one of a kind stock so I think it could be justified at 35 x Earnings. My valuation puts it at somewhere between 80-90 dollars which means its undervalued right now. With the Olympics I see earnings getting better since V has the monopoly on the games which means good quarters to come. So with all this good news for V why isn't it moving up? Is the disappointment around MA holding it back? Does anyone see a trend in the intra day bottoms forming up?
I own V as part of my Long Term Portfolio. Here is what happened. VISA and MA settled a lawsuit with AMEX over being shut out of the debit card business. When you are a monopoly, like VISA and MA you have to appease the Gods every now and then. Now, VISA took the charge last year before it went public. MA just took the charge this quarter. Everyone knew it was coming. It has nothing to do with the strength of MA and VISA's businesses. Visa took a hit due to MA.
The key word in your thread title is "HAD", as in past tense. It's all about future expectations. They aren't too hot considering the economy.
VISA plan for its IPO was to put first $3 billion aside for pending lawsuit. They are the big player in emerging markets, but waiting for new litigation on how they market. China has its own credit card system. VISA has no exposure to default of payments, that is on banks that issue the card. VISA makes money on the transactions and processing. I like this for a longer term hold.
Where can I find info on this *pending* lawsuit from AMEX? I've read lots of research on Visa and no where did I see anything about this pending lawsuit. I thought it was already settled. Wasn't too impressed with the market action today on V or MA for that matter. Dow is up 330 points and V/MA barely moved and on low volume but I still see the upwards trend is still in tact.
a reasonable price for Visa would be something like 55 USD not the current price. The forward pe at current level is just ridiculous.
It is Discover financial lawsuit that is pending. They claim VISA and Mastercard violated antitrust by preventing thier banks from offering discover cards. I think it is September when this goes to trial. Discover company now has dropped the (no surcharge) for their merchants. Now merchants can pass the fee to customer when using debit card. They are in big comptetion with VISA and Mastercard.
what kind of valuation are you using for that? I hear this 55 number tossed around a lot. 20-25 x earnings? Hasn't MC been trading at 30-35 x earnings since its IPO? Since there really are no comparisons wouldn't you expect the same from Visa? I have Visa @ 82 dollars 2.36x35