DFS

US Congress Is Getting Ready to Pass a Massive ~$2.2 Trillion Fiscal Stimulus Bill

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Image Shown: US equities have started to recover some of their lost ground as the likelihood that the US Congress will pass a massive ~$2.2 trillion fiscal stimulus and emergency spending package, dubbed the CARES Act, has increased significantly over the past week as seen through the bounce in the SPDR S&P 500 ETF Trust (SPY). President Trump has clearly indicated that he intends to sign such a bill into law as soon as possible, with the US House of Representatives expected to take up the legislation this upcoming Friday morning on March 27. By Callum Turcan On March 25, the US Senate worked late into the night to secure a bipartisan compromise on a massive ~$2.2 trillion fiscal stimulus … Read more

PayPal and Visa Remain Attractive Long-Term Ideas

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Image Source: Visa Inc – Second Quarter of Fiscal 2022 IR Earnings Presentation By Callum Turcan The payment processing and payment solutions space is attractive. Companies operating in this industry have asset-light business models with relatively modest capital expenditure requirements to maintain a given level of revenues, making free cash flows easier to come by. Additionally, the industry’s growth outlook is incredibly bright and supported by secular tailwinds as the world continues to shift away from cash and towards other payment options (card, mobile apps, QR codes, online payment platforms). Our two favorite companies in this space are PayPal Holdings Inc (PYPL) and Visa Inc (V), and we include both as ideas in the Best Ideas Newsletter portfolio. Online spending … Read more

Visa’s High Margin Business Reveals Consumer Spending Remains Resilient

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  Image: Visa has been a strong performer thus far in 2023.  By Brian Nelson, CFA On October 24, Best Ideas Newsletter portfolio holding Visa (V) reported excellent fourth-quarter results for its fiscal 2023. Net revenues advanced 11% on a year-over-year basis, while non-GAAP net income and non-GAAP earnings per share leapt 18% and 21% year-over-year, respectively, in the period. For the fiscal year, Visa generated an impressive 64.4% operating margin. Payments volume increased 9% and cross-border volume advanced 16%, showcasing that the consumer remains very healthy thanks in part to low unemployment rates, despite concerns over higher mortgage costs, student loan repayments, and general economic uncertainty as savings accrued during the COVID-19 pandemic wane. We continue to be big … Read more

The Best Years Are Ahead

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By Brian Nelson, CFA — The wind is at our backs. — The Federal Reserve, Treasury, and regulatory bodies of the U.S. may have no choice but to keep U.S. markets moving higher. The likelihood of the S&P 500 reaching 2,000 ever again seems remote, and I would not be surprised to see 5,000 on the S&P 500 before we see 2,500-3,000, if the latter may be in the cards. The S&P 500 is trading at ~4,100 at the time of this writing. — The high end of our fair value range on the S&P 500 remains just shy of 4,000, but I foresee a massive shift in long-term capital out of traditional bonds into equities this decade (and markets … Read more