The edge for VISA is they don't carry credit liability like AMEX. They are simply a transaction company; therefore they carry no default risk. Like AMEX which I do carry BTW, they are subject to high default risk in bad economy. In addition, AMEX is already a matured company, which means the only way to grow earnings is to lower default risk, or expand their products which also carry risk at the expense of their revenues. On the other hand, VISA employ less than 6000 people worlwide and they have so much growth potential which carry high valuations (price per share) in the next 5 or 10 years. As far the stock being undervalued, this came from analysts I read about prior to IPO. Much like their counterpart MasterCard (MA) which has a market share around 40% their stock price is at $291 as we speak since going public in 2006. Go figure!
As far the stock outlook, I'm looking to buy more shares in the next several months. My goal is to get 100 shares. So far I've accummulated 40 shares @ 59. I do recommend buying this stock on the dip which is my strategy when i want to accummulate stocks over time to get to my goal. However, I'm long on this stock so you need to adjust your expectation depending your risk tolerance.
Last edited by tripods68 : 05-08-2008 at 10:48 AM.
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