Visa Q1 numbers - beating expectations

One of the things that strikes me about following great companies for a long time is how people underestimate their ability to keep on growing. When we first advised clients to buy Visa shares, it was listing on the New York market at around $15 a share. The actual initial public offering (IPO) took place on March 18, 2008. Prior to that is was a mutual organisation, owned by the banks that issued its branded cards and used its switching network.

We wrote to clients: "We continue to believe that more payments will be done electronically over the coming years, and those that own the highways will collect the toll fees". Here is an example of our earnings coverage, back in 2011. That was written by Sasha.

By 2010 Visanet was processing $4.8 trillion in total transactions for the whole year, split evenly between the US and the rest of the world. That has doubled since then, and is now on track to reach $11 trillion for the 2019 fiscal year. Take a look at some of the key global metrics in the infographic below.



Visa's revenues and profits continue to exceed all expectations. Ahead of last night's release Wall Street analysts had pencilled in $1.25 of earnings on $5,396 for the quarter. The company delivered $1.30 of earnings on $5,506 of sales.

Over the last decade the company has increased in value by ten times. The all-time high was $151,56 in September last year, at which point those early buyers had a ten bagger on their hands. It closed last night at $137.60.

There is still lots of growth to come from this one. Many, many retail transactions in the streets are still done with cash. That will change, as people use cards (debit and credit), apps on their phones and via web connected interfaces. Most of those use Visa, or their competitors MasterCard or China UnionPay. This one is a high conviction buy for all portfolios. It's our most widely-held stock, both by value and number of clients.