Visa Will Be A Premium Value Play For Years To Come

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Since its initial public offering, Visa’s (NYSE:V) stock performance has been nothing short of extraordinary. In its very first day of trading, shares jumped 28% over their IPO price, kicking off a seemingly endless rally that continued for years. On March 19, 2008, Visa’s IPO prices at $44 per share ($11 per share when adjusted for a later stock split). The company earned the title of being the largest U.S. IPO in the history of the stock market. The next day, the first day in which shares were traded on the New York Stock Exchange, the stock closed at $56.50 per share ($14.13 per split-adjusted share).

The IPO was remarkable in context. Remember, this was March 2008, just five days after JPMorgan offered to buy the remnants of the battered investment bank Bear Stearns for just $2 per share. It was a trying time for financial stocks, but Visa was a clear exception.

Benefits

 Visa (V) reported a total of 41.8 billion transactions in fiscal 4Q16, compared to 27.9 billion in fiscal 4Q15, a rise of 50% year-over-year. This rise was mainly due to its addition of the Visa Europe business and higher spending and payment volumes. Total transaction growth was helped in the quarter by technological advancements, mobile payment systems, online purchases, and changing customer patterns. Visa is investing heavily in these areas. As the company penetrates further into developing markets, striking more partnerships in the United States and Europe, it could see continued high growth through payments and processing.

Future Potential

 With the constant change in the financial industry it’s hard to find reliable stock that is gaining both growth and market share, while minimizing. Visa is being mindful to stay up on it’s technological advancement, while also not ignoring possible threats and industry changes from upstart industries such as Fintech.

As the global market continues to grow and more third world countries begin to join the exchange markets, Visa is well place to become more of the dominant payment processor. It’s presence in the Middle East, Asia, and Pacific Rim surges with each passing quarter and is bound to create great value for investors and be a profitable security for at the next five years.

Author: Jamaal W Vetose, B.S. Finance

 

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