Visa Inc. (V)

This has room to run. His model price is $79.53 a 20% premium over what he thinks is Fair Value. Like all strong stocks, you want to buy this on a dip.

Technicals are great. The stock has gone into all-time highs. Technically, it is in an upward trend, outperforming the market, and momentum indicators are positive. On a technical point of view, you want to stick with it. Seasonally, it reaches a very important peak around the middle of July. That hasn’t happened this year.

Great, great company. One of the central players in the electronic commerce. Purchases of anything are happening increasingly electronically, and the credit cards are right at the front of that. Great franchise and great business, but it is trading at a 52-week all-time high. Expensive.

Ecommerce. He is not sure anyone buys it for the dividend. It is a very low yielding stock. It is a growth story. It is not a cheap stock, but it looks like it will continue to grow.

They are the best positioned for on-line payments. It is only going to get higher in volume. Their return on capital since 2008 is 30% and it is not going to change. (Analysts’ target: $111.50).

It is a technology company, a toll collector within that sector. $17 Trillion turns over across the globe. It is becoming more and more ‘electronicified’. They are growing and getting more avenues of getting paid. (Analysts’ target: $105.00).

One of the best businesses in the world. A network toll road for businesses. They acquired Visa Europe and are trying very hard to get margins up to what they are in the regular business. There is still so much money being spent with cash, so the runway is very large. Has never been a cheap stock, and doesn’t think it ever will be. If you are confident in the next 3-5 years, you just buy it.

This has been a winning rock star in terms of share price appreciation. There is still lots of upside. He wants companies with a minimum dividend of 1%, so he doesn’t own this company. Trading at about 28X PE. Their acquisition of Visa Europe was key. The consumer in Europe still uses considerable cash. He would suggest you take a half or quarter position and just be patient, and try to build a full position over 6 or 12-month period.

Technically speaking, this is a technology name, but probably acts a little more between a technology name and a financial name. The long-term secular move is away from cash and cheques, to plastic. This continues to make new highs. Currently trading at around the 50-day moving average. Look for small dips to add to your holdings.

Financials is a core theme for him. He likes the large US banks and regional banks, the asset managers, capital markets companies and really likes financial technology companies. If rates start to move higher, it is possible you could get a little better performance from the banks themselves, but as a long-term secular theme, financial technology is going to continue to be in favour.

This has never been a cheap stock and never will be a cheap stock, because the company compounds capital at a significantly high rate. Generates terrific earnings growth and high ROE’s. Thinks it will benefit from higher interest rates. In 3-5 years you are going to be very happy to have owned this stock.

TSLA-Q vs. V-N vs. FB-Q. He likes both V-N & FB-Q. V-N is a major player when it comes to transactions. FB-Q would be his favourite tech company. They own the world. They are a very innovative company. They have made great acquisitions. TSLA-Q he goes back and forth on. He is a believer in electric vehicles, but does not think that much of TSLA-Q. Every study shows there will be a lot more electric cars on the road in the future.

This has very strong seasonal characteristics from around the end of January right through until early May. Technically, this is outperforming the market and has an upward trend. A lot of the other US financial service stocks have come under a lot of technical pressure in the last little while. It is kind of vulnerable, overvalued on a technical and seasonal basis. Stick with it until you start to see signs of technical weakness.

He likes this a lot. The secular shift of global payments from cash will continue, and he thinks it will continue long-term. There are lots of markets for them to get into. A lot of the world’s population is still using cash, so there is a long runway for this company. There are also huge barriers to entry for this space. Feels it is a bit overbought at this point at 68 RSI, so you might want to wait for it to come down to the 50-day moving average, at $90-$91. You will do well regardless of what price you buy that.

MasterCard (MA-N) or Visa (V-N)? Either of these would be good. They trade at multiples that are generally significantly higher than market multiples. Both companies capture the payments, and the threat of fees going down is low. MasterCard has a little more international exposure, and is a bit more advanced on the technology side, but this one is the dominant player.