SQ

Best Idea Visa Is a Free Cash Flow Cow

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Image Shown: Visa Inc is a tremendous free cash flow generator and is very shareholder friendly. Management distributes cash back to investors primarily through sizable share repurchases and to a lesser extent, through dividend increases. Image Source: Visa Inc – Third Quarter of Fiscal 2022 IR Earnings Presentation By Calum Turcan Visa Inc (V) reported third quarter earnings for fiscal 2022 (period ended June 30, 2022) that beat both consensus top- and bottom-line estimates. Visa is included in the Best Ideas Newsletter portfolio as we view its capital appreciation upside potential quite favorably. Our recently updated fair value estimate for Visa stands at $226 per share with room for upside as the high end of our fair value estimate range … Read more

ICYMI (Aug 19) — ALERT — PYPL, META, GOOG, V — Making Some Big Changes in the Simulated Best Ideas Newsletter Portfolio!

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This note was emailed to members August 19. Alert >> Image Shown: We are very happy with the overall “performance” of the simulated Best Ideas Newsletter portfolio, which is carving out 2.6 percentage points of relative outperformance so far in 2022 on a price-only basis, as shown in the table above. However, we’re making some big changes to the simulated newsletter portfolio today on some of our favorite names. Our best ideas continue to be in the simulated Best Ideas Newsletter portfolio, the simulated Dividend Growth Newsletter portfolio, the simulated High Yield Dividend Newsletter portfolio, the ESG Newsletter portfolio, and the Exclusive publication, as well as with our additional options commentary. “So when it comes to using data, you can think … Read more

Global Payments Buying EVO Payments as Fintech Industry Consolidates

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Image Shown: Global Payments Inc is in the process of acquiring EVO Payments Inc. Image Source: Global Payments Inc – Second Quarter of 2022 IR Earnings Presentation By Callum Turcan Global Payments Inc (GPN) announced it would acquire EVO Payments Inc (EVOP) for $34 per share through an all-cash deal worth ~$4.0 billion by enterprise value. As its name would suggest, Global Payments provides payment technology and software solutions to customers in over 100 countries. By acquiring EVO Payments, which focuses on providing payment technology and services to small and medium-sized businesses in over 50 markets worldwide, Global Payments will extend its reach into new markets (including Chile, Germany, Greece, and Poland) while enhancing its presence in existing markets (including … Read more

PayPal’s Margin Pressure, Flattish Earnings Outlook Shocks Market; Fair Value Estimate Reduced

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Image Shown: PayPal Holdings Inc grew at a robust pace in 2021 though its margin outlook is not as promising as once believed. Image Source: PayPal Holdings Inc – Fourth Quarter of 2021 earnings press release By Callum Turcan On February 1, PayPal Holdings Inc (PYPL) reported fourth quarter 2021 earnings that beat consensus top-line estimates but missed consensus bottom-line estimates. While PayPal put out guidance that called for its revenues to grow by mid-to-upper teens in 2022, the market was unimpressed with its non-GAAP earnings outlook that called for marginal growth at the midpoint. It now stands to reason that PayPal’s operating/earnings leverage potential is not what it first appeared to be, particularly in light of the meager earnings … Read more

Alphabet and PayPal Report Fourth-Quarter 2021 Results

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Video: Valuentum’s President Brian Michael Nelson, CFA, walks through the fourth-quarter 2021 results of Alphabet and PayPal. Related: SQ, LSPD, SOFI, UPST, PSFE, AFRM, FISV, GPN, LC, BLND, RKT, COIN, SI, HOOD, MQ, FOUR, RPAY, PAYA, FLT, EVOP, GDOT, WEX, WU, EFX, AXP, DFS, SOCL, FINX, GFOF ———- Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are free.    Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE. Some of the other securities written … Read more

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

Some Questions Answered: The Fair Value Estimate Range and ROIC

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Q: In the 16-page stock reports, why doesn’t the ‘percentage undervalued / overvalued’ match up to the actual discount/premium to Valuentum’s fair value estimate of the company? A: We view the intrinsic value of a company as a Fair Value Range, not necessarily a single point estimate, so the undervalued and overvalued calculations match up to either the low fair value estimate or high fair value estimate, respectively. Within the context of a margin of safety, we wouldn’t necessarily view a company to be worth precisely $55 per share, for example; instead we’d view the company as worth between $50 (low end fair value estimate) and $60 per share (high end fair value estimate), with the low and high fair … Read more

ICYMI: The PayPal Wave Recedes, We Still Like Shares

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This article was originally published November 10, 2021. The fair value estimate has been updated in this version. Video: PayPal By Brian Nelson, CFA We knew something wasn’t quite lining up at digital-payments provider PayPal (PYPL) when the rumor mill started to turn with reports it was interested in scooping up Pinterest (PINS) for a pretty penny. PayPal has since put to rest rumors about buying Pinterest, but it left investors with a sour outlook when it issued third-quarter 2021 results November 8. Though the market wasn’t happy with the forecast for the fourth quarter of 2021 and into 2022, the company continues to grow revenue at a robust pace, and we expect several key initiatives to drive sustainable top-line … Read more

Hut 8 Mining Is an Interesting Play on Cryptocurrencies

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Image Source: Hut 8 Mining Corporation – November 2021 IR Presentation By Callum Turcan Hut 8 Mining Corporation (HUT) is headquartered in Toronto, Canada (in the province of Ontario), and “mines” digital assets from two operations in Alberta, Canada (in the city of Medicine Hat and town of Drumheller). The firm is in the process of developing a third mining operation in Ontario, Canada, at the small city of North Bay, having secured a long-term power purchase agreement with Validus Power Corp. Overview  Though Hut 8 Mining mines for both bitcoin (BITO) and ether, two of the most popular cryptocurrencies, when it mines for Ether it historically has preferred to get paid in bitcoin. Hut 8 Mining has built up … 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