FISV

Visa Remains One of Our Favorite Ideas

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Image Shown: Visa Inc, one of our favorite companies, has been growing robustly of late. Image Source: Visa Inc – First Quarter of Fiscal 2022 IR Earnings Presentation By Callum Turcan On January 27, Visa Inc (V) reported first quarter earnings for fiscal 2022 (period ended December 31, 2021) that beat both consensus top- and bottom-line estimates. Shares of V shot higher after its results were made public. We include Visa as a “top-weighted” idea in the Best Ideas Newsletter portfolio (link here) and remain huge fans of the company. Our fair value estimate sits at $255 per share of V, well above where Visa is trading at as of this writing, indicating the payment processing giant has ample room … Read more

Don’t Throw the Baby Out with the Bathwater

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Image: Erica Nicol Takeaways: Junk tech should continue to collapse, but the stylistic area of large cap growth and big cap tech should remain resilient. Moderately elevated levels of inflation coupled with interest rates hovering at all-time lows isn’t a terrible combination. In fact, it’s not bad at all. The markets are digesting the huge gains of the past few years so far in 2022, and the excesses in ARKK funds, crypto, SPACs, and meme stocks are being rid from the system. Our best ideas are “outperforming” the very benchmarks that are outperforming everyone else. The BIN portfolio is down 6.4% and the DGN portfolio is down 3.2% year to date. The SPY is down 7.8%, while the average investor … Read more

Hard Work and the Trust That Binds

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Image Source: Terry Johnson By Brian Nelson, CFA We’ll have our traditional Valuentum Weekly email coming out on Sunday, and I’m excited to say our team is putting the finishing touches on our technology industry update, so we’ll have a whole bunch of fresh reports for you to look at Sunday evening/Monday morning. It’s easy to forget how much we’ve been through the past two years. Often, we forget how helpful the warning that markets were going to crash was the weekend before they did on February 22, 2020, “Is a Stock Market Crash Coming? – Coronavirus Update and P/E Ratios,” how we thought dollar-cost-averaging made sense at the bottom in March 2020, and how we went “all-in” in April … Read more

Large Cap Growth Has More Room To Run

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“The stylistic area of large cap growth has been one of our favorite areas because of the strong net cash rich, free cash flow generating, secular growth powerhouses that make up much of the space. The image is a rundown of the key Valuentum statistics for the top 15 holdings of the Schwab U.S. Large Cap Growth ETF (SCHG). We believe where large cap growth goes, so does the broader market, considering the hefty weightings of some of these stocks in other broad-based indices. Based on the high end of our fair value estimate range for this group of bellwethers, the broader U.S. markets still have room to run, to the tune of 7%+, despite the many highs already reached … Read more

FinTech Stocks Still Attractive, Market Overreacting to Visa’s Cross-Border Travel Outlook

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Image: Visa continues to rake in the free cash flow. Though its outlook is clouded somewhat by recovering cross-border travel transaction volumes, we still like its asset-light, free-cash-flow rich business model. By Brian Nelson, CFA It’s easy to lose sight of everyday life when we hear stories about the latest and greatest cryptocurrency or the next iteration of yet another ETF that centers on one theme or another, but when we take a step back, almost all of us are still using and continuing to use one of a few payment options. Maybe it’s your Visa (V) Card, your Mastercard (MA), Discover (DFS) Card, American Express (AXP) Card, Capital One Financial (COH) Card or perhaps PayPal (PYPL), Stripe, or Square … Read more

Best Idea Visa on the Rebound, Generating Gobs of Free Cash Flow

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Image Shown: Visa Inc is a stellar free cash flow generator and is included as an idea in our Best Ideas Newsletter portfolio. Image Source: Visa Inc – Third Quarter of Fiscal 2021 IR Earnings Presentation By Callum Turcan We’re huge fans of the payment processing and payment solutions space. This industry is supported by secular growth tailwinds due to the global shift away from cash-to-card and card-not-present (e.g. online purchases) purchase options, and the ongoing proliferation of e-commerce. Furthermore, companies in this space benefit immensely from the network effect, which creates an economic moat for their business.  These companies are incredibly lucrative with relatively high operating margins and impressive free-cash-flow generating abilities, aided by their relatively modest capital expenditure … Read more

Best Idea PayPal Is a Tremendous Enterprise with Ample Capital Appreciation Upside

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Image Source: PayPal Holdings Inc – 2021 Investor Day Presentation By Callum Turcan PayPal Holdings Inc (PYPL) is a stellar enterprise, and we view the fintech company’s capital appreciation upside quite favorably, which is why we include shares of PYPL as an idea in the Best Ideas Newsletter portfolio with a significant ‘weighting.’ Shares of PYPL have been on a steady upward climb of late, and investors continue to warm up to the name. Expansive Offerings Creates Sizable Synergies PayPal put up stellar performance during the first half of 2021. Its number of active accounts rose to 403 million at the end of June 2021 from 377 million at the end of December 2020, while its payment transactions per active … Read more

Best Ideas PayPal and Visa Have Ample Capital Appreciation Upside Potential

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Image Shown: PayPal Holdings Inc’s digital wallet offers the firm multiple sources of upside. Image Source: PayPal Holdings Inc – February 2021 Investor Day Presentation By Callum Turcan The payment processing and fintech industries are incredibly lucrative and supported by powerful secular growth tailwinds such as the proliferation of e-commerce and the global shift away from cash (towards card, tap to pay, QR code, online, and other payment methods). PayPal Holdings Inc (PYPL) and Visa Inc (V) are two of our favorites in the space, and we include both firms as ideas in the Best Ideas Newsletter portfolio. PayPal’s Long Term Growth Prospects Are Immense PayPal offers an expansive slate of services for consumers and merchants including checkout and point-of-sale … Read more

ICYMI — Video: Exclusive 2020 — Furthering the Financial Discipline

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ICYMI — Video: Exclusive 2020 — Furthering the Financial Discipline — — In this 40+ minute video jam-packed with must-watch content, Valuentum’s President Brian Nelson talks about the Theory of Universal Valuation and how his work is furthering the financial discipline. Learn the pitfalls of factor investing and modern portfolio theory and how the efficient markets hypothesis holds little substance in the wake of COVID-19. He’ll talk about which companies Valuentum likes and why, and which areas he’s avoiding. This and more in Valuentum’s 2020 Exclusive conference call.   Note: This video was originally published August 2, 2020.    To watch the video >>   The Theory of Universal Valuation —– Valuentum members have access to our 16-page stock reports, … Read more

PayPal Reports Strongest First Quarter Results in History!

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Image Shown: A snapshot of PayPal’s first-quarter performance. Image Source: PayPal. By Brian Nelson, CFA On May 5, PayPal Holdings (PYPL), which is included as a highly-weighted idea in the Best Ideas Newsletter portfolio, reported fantastic first-quarter 2021 earnings. Revenue grew ~31% on a year-over-year basis in the quarter, helping to drive non-GAAP earnings per share to $1.22, up 84% from the $0.66 registered in the year-ago period. Total payment volume leapt ~50%, and the company added ~14.5 million net new active accounts in the period. PayPal raised its guidance for revenue, earnings, total payment volume and net new active accounts for 2021. Revenue is now expected to advance ~20% at present currency exchange rates, while non-GAAP earnings per share … Read more