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Visa Inc. Message Board

  • hundleyrandy hundleyrandy Feb 5, 2014 9:55 PM Flag

    Emerging Markets is where V makes Money

    But emerging markets are tanking. How many husbands/wives in those emerging markets are confiscating their spouses credit cards, saying its time for austerity? This stock trades at a PE of 30 but it only grew earnings per share at 14%. The stock is double its real value. The only thing that keeps it from totally tanking is the stock buyback program. But that program is so small it can only save 3% of the company's total market cap. Once this stock starts to drop, which it is already giving indications of doing so, it will fall like a rock.

    Three things:

    1. Stock is double a reasonable valuation;
    2. Persons in emerging markets will cut back on credit card use; and
    3. Market is correcting, taking no prisoners but precious metals.

    All this means V heading lower. V goes to $165 per share by April 1.

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    • Some questions about your 3 points:
      1. So you think a PEG of 1 is appropriate for a stable growth stock? Is there a single stable growth stock you can point to with a PEG of 1?
      2. Visa sales and earnings outside the US, including in other developed markets, are less than half its total. So why say Emerging Markets Is Where V Makes Money?
      3. Overall (though there are some outliers), emerging markets growth rates in 2014 are projected to be higher than in the US. For instance (from the Jan 18th Economist p89), I see 2014 estimates of Indonesia +5.6% real & +12.6% nominal (including inflation), Nigeria +7.0% real, India +4.3% real & +14.4% nominal. Given personal expenditures rise at the nominal (not real) rate, why does this suggest card transaction volumes will drop?
      4. Do you see US consumers limiting their credit card use because the US market is tanking right now? Do you think emerging markets consumers are more influenced by their local stock market than US consumers are?
      5. So the market tanked in January, you think that means it will continue to tank until April? Chartist?

      So since you seem to know so little about V, maybe you should think about why you are here?

    • All that matters is what the money likes here!

79.00-0.06(-0.08%)May 26 4:03 PMEDT