Visa (V) is a really good stock. It seems to just rise and rise. In fact, I compiled this data when the stock was $177 on September 9th, and already the stock’s $192. I keep hoping I can get V at a discount. But the stock’s been telling me: when you’re ready, come and get it.
Truth be told, I owned Visa years ago. I sold it because we already had MasterCard and I was trying to get the number of the positions in the Growth Portfolio down because we were in a bear market. My purchase price was $76 on V, I bought in on 7/8/08. I sold the stock on 8/5/09 for $68, losing 11% on the trade. Four years later, the stock’s almost tripled.
One Year Chart
Here’s the 2013 Q2 one-year chart of V. With a P/E of 23, the stock’s fairly valued. Well, we have to keep in mind this data is from when the stock was $177. Today at the current quote the P/E is 25.
Visa is expected to grow profits 19% a year, it also pays a 1% dividend. So investors are getting 20% growth with high certainty and paying 25 times earnings for it.
Fair Value
I feel V is worth 25 times earnings, which is $190 a share. Next year I see $223 or more. One nice thing about V is the company ups annual earnings estimates every quarter. 2013 estimates have gone from $7.26 to $7.59 the past four quarters. Check the Earnings Table to see for yourself.
Sharek’s Take
I missed out on Visa at $177 and now the stock’s $192. I keep waiting for a dip, but the stock doesn’t go down much. Still, I feel the upside isn’t great and we should continue to hold out. Visa responds by saying: when you’re ready come and get it.
View the Earnings Table here. View the Profit History here.View the Ten Year Chart here.
