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Visa is another company where the "share price hasn't done anything" recently. In fact over the last 12 months, it has gone backwards. Its 52 week high is $220 and it is currently trading around $195 a share.
Intuitively, having a pandemic where people shop more online and try to avoid cash in their everyday lives should be good for Visa? From that perspective, Visa has done well. Over the last year their total volumes increased 5%.
A big money spinner for Visa is their cross-border transactions - big margins involved in connecting banks from different countries. They had 22% fewer cross-border transactions due to lower tourism, meaning a 28% drop in that division's revenue. Interestingly, Visa saw an increase in transactions between the US and Mexico, and the US and the Caribbean. Americans looking for sunny places to spend their Winter break?
Covid has pushed more people online and away from cash. We don't see that trend changing once the world goes back to normal. What will change though is a rebound to pre-pandemic levels of cross-border spending. The Visa share price has taken a pause due to a temporary drop in profits. Management is using these lower share prices and super low interest rates to buy back $8 billion worth of Visa stock. You should also be buying.
