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VeriFone Systems, Inc. Message Board

  • greedorfear greedorfear Dec 2, 2012 7:50 AM Flag

    Old Buffett saying...

    In the short teram the market is a voting machine, in the long term it's a weighing machine (meaning earnings). I guess we'll know soon why the market is so donn on PAY and there are so many shorts. Guess I'm missing something because to me, this is way undervalued. I haven't seen one good short argument on this board but there must be something that no one is posting because there are still a ton of shorts. Earnings are supposed to grow double the industry (and the S&P) over the next 5 years but the PE is around half the industry (meaning payments/financial services). In my opinion the competition has been way overblown. Am I the sucker sitting at the poker table as the old saying goes? Please someone post a good short argument...

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    • PAY seems to be on a coin edge now, and stuck in this tight trading range. I suppose we will hear some news at earnings and more importantly, the guidance for 2013.
      What would concern me is PAY's ability to continue to manage the debt from the Point acquisition, as they are carrying a lot of long term debt as a percentage of market cap.
      What is very interesting to me is that last month, Macquarie Group took a 12.93% stake in PAY. Macquarie Group is THE largest investment bank in Australia as well as the leading company for mergers and acquisitions. The 12.93% stake represents about 1/2 billion dollars at the current market cap. This can mean a few things:
      1. a large company (Google, SAP, Intuit, etc.) is shopping around to acquire PAY.
      2. PAY is seeking to acquire another company (possibly for an aggressive thrust into India and/or China.
      3. Macquarie Group simply bought almost 12.93% of PAY for investment purposes.

      Wayne Johnson of Raymond James put out a very good research report on Verifone about 2 months ago. It is a very complete assessment of PAY as an investment,as well as a brief on other payment as service companies and payment processors. As I cannot post the link, you can probably access a copy by entering in Google search:
      "Wayne Johnson communications & technology report".
      The report is from Sept 17th. and is a pdf U.S. Research Report. They still note many concerns although still maintain a Strong Buy with a $60 target.

      • 2 Replies to subseaworker
      • If you want to see Subsea's article Google--------------- US RESEARCH- The Association for Financial Technology

      • Investment Thesis: Analyst Wayne Johnson says VeriFone is Raymond James' top investment idea in the payments sector, "given the company's strong market position, exposure to secular tailwinds, and significant company-driven revenue and profitability expansion opportunities."

        Johnson adds that VeriFone should benefit from favorable market dynamics such as improved competitive landscape, new payment products, adoption of electronic payments in traditionally cash-based industries like taxis, and the demand for value-added services such as multimedia, advertising, and mobile payments capabilities.

    • In eleven days Green , the shorts will be fleeing IMO , we will be close to 40 , but if this earnings is another disappointment , it will be time for a new CEO. I think we will have a minimum of 10% rally, so at least 3 bucks and change but I think 20% if it is a blowout, that is not out of the question , which would put us at approximately 37 , I've noticed that this stock usually rally's when it gets close to earnings , that's why it has been hit hard when it misses lately . Good Luck

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