I’ve been trying to get back in shares of Visa (V) all year. But each time I evaluate the stock it shows the shares being fully valued. This quarter is no exception, as the stock’s only got 2% upside to my 2014 Fair Value.
One Year Chart
First of all Visa is a perennial 20% grower. And selling at a P/E of 22, the stock’s got little upside. Another thing is both quarterly and annual profit estimates just fell, so Visa doesn’t have (shouldn’t have as much momentum as it usually does.
This move shown here is 33% (from $150 to $200) but profit growth has only averaged 20% during that time. Again, I think the stock’s a little high to buy.
Fair Value
I feel V is worth 23 times earnings. The stock hasn’t had a median P/E as high as 23 since 2009. Since then the median P/E has been between 17 and 22.
Sharek’s Take
I feel Visa is a great stock to buy and hold. I feel the company can grow profits around 20% per year in addition to paying investors a 1% dividend. Still the stock’s got little upside right now, wait for the stock market to correct and get Visa if it dips.
View the Earnings Table here. View the Profit History here.View the Ten Year Chart here.
