Visa Inc

This research material has been prepared by Matthew Smith through independent research facilities and contains an independent view to ABN AMRO Morgans Limited.

Debit & Credit Please?
By Matthew Smith

Visa Inc. Summary of Key Points
  • World Leader in the industry
  • Monopolistic operating environment
  • Easy to understand business 
  • Strategically positioned from global point of view
  • Looking to BUY on price weakness
  • Looking to hold Visa as a core holding indefinitely
Visa Inc. is a retail electronic payments network. The Company facilitates global commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses and government entities for the past 30 years. Its primary customers are financial institutions, for which it provides processing services and payment product platforms, including platforms for consumer credit, debit, prepaid and commercial payments.

The Company has three business operations: transaction processing services, product platforms and payments network management. In October 2007, the Company completed the series of transactions, in which Visa U.S.A., Visa International, Visa Canada and Inovant became direct or indirect subsidiaries of Visa Inc.

Visa was floated on 18th March 2008; its IPO price was $44.00. When Visa opened it traded at approximately $60.00, an instant gain of 36% for shareholders.

Visa managed to reach highs of $89.00 in May this year and has since dropped back to initial levels around the $65.00 mark.

Visa first two earnings announcements have beaten analyst's expectations and the Q4 earnings announcement is to be released after market close on the 29th October, analysts expect Visa to be on par once again.

Why Visa? Because Visa has the world's largest payment network, in which banks and businesses are eager to participate. Because Visa just processes payments, rather than acting as a lender in transactions, it's nicely insulated from the credit crunch. Paperless payments are projected to surge from a bit more than 40% now to 70% of total payments in 2010. Visa is riding the crest of that wave and you should too.

Please call us and talk to your adviser if you wish to take advantage of this opportunity.
Phone 07 4771 4577

*This article does not constitute advice to any person. The views expressed here are those of the author and do not necessarily reflect those of ABN AMRO Morgans Limited.  Advisors in this office may own shares in the companies named here.

Matthew Smith, B Com | Equities & Derivatives [Authorised Rep # 327 246]   
ABN AMRO Morgans Limited | ABN 49 010 669 726 | AFSL 235410
Level 2,  105 Denham Street, Townsville, Qld 4810
Ph +61 7 4771 4577 | Fax +61 7 4771 4527 | msmith@abnamromorgans.com.au