Research archive for V

Visa released results two days ago, but less than 48 hours ago if you know what I mean. Here are the results for the full year and fourth quarter, downloadable from their IR site: Visa Inc. Reports Strong Fiscal Fourth Quarter and Full-Year 2013 Earnings. Nice. Mr. Market did not really think that the results were that great, the stock sold off post the results, there was obviously a little disappointment in the numbers.

What happened to Visa last night? The stock was seven and a half percent lower on the session, giving back most of the positive action over the last 10 weeks. It has all to do with the capping of swipe fees of specifically debit cards, of which Visa has nearly a one third share in the US. Cast your mind back, the original fee was set at 12 US cents, but the payment processing companies managed to hike that to 21 cents. Yesterday a court, a District Court, overruled the US Fed's authority to raise the fee, at the time. It seems like a knee jerk reaction to me, nothing is final. Nothing is ever final in terms of rules and regulations set in stone by politicians. It changes and evolves. We will see what transpires, but I doubt that it is a huge deal for now, but would have a fair impact if reversed.

Last night we received third quarter results from what is now our biggest holding in New York, Visa. Thanks to its performance and consistent additions it has overtaken both Apple and GE in our portfolios. So far this year the stock has returned 23.2%, 48.51% over the last year and 155% over the last 5 years. That is just the share price and excludes dividends. Let's look at the results and see if we can expect these kinds of returns going forward.

The banks used to own and run Visa in order to link banks with different card issuances. When it listed in 2008 the banks each got a portion of the company. Some of the banks sold, some of them held on to them. The ones that held on have obviously done very well as the share price has gone from the listing price of around $64 to $156 today. Since the reorganisation in 2007 Visa and Visa Europe have operated independently because the members (banks) in Europe decided to keep it as a non-profit association and pay Visa Inc royalties for their services.

One of our best performers in New York, Visa, reported first quarter earnings. It seems like such an obvious story. Carrying cash is a liability of sorts, some people want to steal it. It makes life so much easier and safer to pay electronically. The people want it, governments want it because it makes it easier to collect taxes but the majority of transactions still take place in cash, especially in the developing world. That is why Visa's strategy is to get half of their revenue outside the US by 2015. $9 trillion of card spending is expected in the Asia pacific region in 2016. That is 42% of worldwide card spend. Visa are certainly targeting growth in that region.

Last night after the market closed, Visa reported full year numbers which beat expectations. This stock has been one of our best performers. It is up 45% in a year and has nearly doubled since June last year. Like all companies it comes with some risks but there is no doubt this is a fantastic business, sitting in a sweet spot as our globe shifts from cash to plastic. According to the website Visa processes more than 10 000 transactions a second in over 200 countries around the world. But at current levels is it a good investment? Let's look at the numbers.

Visa takes you places. Good timing for the release of the Visa Q3 numbers, the Olympics start tomorrow and lest you forget, they are one of the sponsors. I hope that the event organisers don't confuse the priceless pay off line, with Visa, when in actual fact it belongs to MasterCard. Ouch, that was a sideswipe at the organisers of the football last evening who confused North Korea (the people's democratic republic) and the South Korean flags. Well, at least the supreme leader/emperor seemingly got married. But we are getting off the topic here, we were talking about the Visa results. And I am pretty sure that one can't use a Visa card in North Korea, such is the "progress" there.

Visa is now our third most widely held stock in the US portfolio behind Apple and GE. So when big news concerning the company is released it is important to cover it. The biggest risk facing Visa comes from regulation and lobbying from merchants. Remember that they are not a financial institution and they take no credit risk. They process payments and take a small percentage.

We prefer Visa (ha-ha) as an investment, the stock took some heat afterhours with an announcement that coincided with their earnings release, and a US anti-trust investigation.

BHP Billiton this morning have announced a MAJOR INVESTMENT AND RESERVE INCREASE AT ESCONDIDA. Cast your mind back to the results at the beginning of last week, when we spoke about the fall off in profits from this operation specifically. And how, it was actually the swing between what would have been marginally lower earnings, and what would have been very good earnings, had the operation delivered the same performance as the year prior.

Yesterday, Visa, one of the most exciting companies around came out with quarterly earnings yesterday which beat consensus. Just for the record Visa have beaten estimates for every quarter since listing in March 2008. Either that is very impressive or analysts need to raise their game. That's not fair. Remember that these guys do not actually take any credit risk, it's the banks that do that. They are the ones sitting at the forefront of the evolution taking place in the way we pay for just about anything.

One of my favourite companies, Visa came out with their quarterly earnings after the market closed last night. It's not hard to explain why this company is a favourite. People are changing their payment methods from cash and checks to plastic and Visa are one of the ones who make this possible. They have built processing networks which are capable of handling more than 20 000 transactions per second. They do not issue cards or credit and are not exposed to any of that risk. Instead they charge fees for processing transactions made on their own cards.

Visa, another one of our recommended stocks over in New York, enjoyed a great time last evening. Along with Mastercard. And the reason? Well, not because the Greeks are going to stop using cash and move to plastic, but rather that the Federal Reserve changed their minds about the fee cap on debit card swipes. It went from 12 to 21 cents a transaction. "It" being the swipe fee. Check out the WSJ articles titled Fed Softens 'Swipe' Fees , and see that five folks votes were all that counted. Four yes votes and one no vote. Visa popped a monster 15 percent to 86.57 Dollars a share. MasterCard popped 11.3 percent to 309.7 Dollars a share. This is good news for shareholders of Visa (and MasterCard), of which we have many. This is a 52 week high for Visa and still some way off the all time high of just over 96 and a half reached in April last year.

Visa released their quarterly results after hours. Cool share code, simple old V, even though the company has not been listed for a long time. The top line was a meet, the bottom line was a beat, but afterhours and in the normal session the stock traded lower. It is amazing how a company can grow their earnings into their share price and how the market gets it right for the big ticket listed types. Although Visa is smaller than you think, quarterly revenue was only 2.2 billion Dollars. That is it. But net income is 881 million Dollars. Wow. Hugely profitable, as you can no doubt see.

Visa reported after hours. Been through a tough time lately as government look to crimp their margins in the US, with a cap on what they can charge. Our simple thesis on these electronic payment processing folk like Visa is that as we switch to everything from internet transactions, more debit cards with less notes and checks (cheques) transactions, it is the fellows processing that will make money. And this is not just in the developed world, moving away from traditional payment systems. As listed entities, both Visa and MasterCard are relatively new. Visa listed in May 2008, MasterCard in May 2006.