Exclusive Analysis for the Discerning Investor
A class action lawsuit against Visa, Mastercard, and banks that issue debt and credit cards was settled Friday evening. Though many of the details aren’t available, the $7.25 billion settlement has a negligible impact on our fair value estimates.
Facebook could either be a 1) a dud, 2) pretty much what it is now, or 3) the new Internet. We dig into these scenarios and arrive at an expected fair value for each.
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Best Idea eBay () reported fantastic first-quarter results after the close Wednesday. Both revenue and net income expanded at a nice double-digit pace, as PayPal continues to drive strong performance. In after-hours trading, the shares are up 6%+ (to over $38 per share) on the report. We are strongly considering adding to our existing position in the portfolio of our Best Ideas Newsletter, as we think the shares are conservatively worth $46 each (with upside to the high $50’s based on the upper end of our fair value range). << View Our Newsletter Archives In the first quarter, the global commerce platform and payments leader’s revenue advanced an impressive 29% from the same period a year ago. Net income on a … Read more
Best-idea eBay (EBAY) reported strong fourth-quarter results and provided conservative forward guidance. We are maintaining our above-market fair value estimate of the online auction and payment processor. eBay’s revenue for its fourth quarter jumped 35% from the same period a year ago. The firm’s PayPal business continued to perform well, ending the quarter with 106.3 million active registered accounts (up 13% from the same period a year ago). Revenue from PayPal jumped an impressive 28% thanks to continued merchant and consumer adoption and increased penetration on eBay. PayPal’s net total payment volume (TPV) grew 24%, and the firm noted that its international markets exceeded revenue from the US for the first time, reflecting its global footprint. Its Marketplaces business also … Read more
eBay (EBAY) reported strong third-quarter results Wednesday that showed particular strength in Paypal, its global payments business. The firm remains one of our best ideas, and we are maintaining our $47 fair value estimate (the stock is trading just over $30 per share). The global ecommerce and online payments leader saw revenue increase an impressive 32% from the prior-year period, while non-GAAP net income jumped 18% and non-GAAP diluted earnings-per-share advanced to $0.48 (up 20%), meeting expectations. The revenue growth number was its best performance since 2006! Paypal was particularly strong during the period, revealing a 14% increase in active registered accounts—Paypal’s net total payment volume was up over 30% in the quarter. The firm also noted that total mobile payment … Read more
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
Image: How the VBI rating system has ranked equities so far this year. By Brian Nelson, CFA At Valuentum, we use the Valuentum Buying Index (VBI) to source ideas into diversified simulated newsletter portfolios, and the VBI may be most applicable to the simulated Best Ideas Newsletter portfolio, where we generally like to include ideas when they register a high VBI rating and remove them when they register a low VBI rating. We always use the VBI in a portfolio setting and never by itself. But what about the Valuentum Buying Index ratings, themselves? How did they “perform” during 2022 in one of the worst years for stock market investors in history? Well, not as spectacular as we would have … Read more