Visa’s Recent Surge Hasn’t Changed My Mind

Summary:

• Visa remains a solid company with strong operational performance, but its current valuation justifies maintaining a ‘hold’ rating.
• Despite mixed financial results, Visa’s stock has outperformed the S&P 500 recently, yet still lags behind in relative performance for the long haul.
• Recent financials show revenue and net income growth, but mixed profitability metrics and high valuation temper enthusiasm.
• Visa’s aggressive share buyback program has proven value-accretive, but not enough to shift my ‘hold’ rating given current valuations.

I love investing in high quality companies. However, I don’t usually enjoy paying the prices demanded by the market in order to participate in the upside potential of these firms. A good example of this can be seen by looking at payment

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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