Visa Inc. (V)

This is a play on consumer spending. As the US economy has started to do better, V-N has done better. The same applies to Europe. It has been a fabulous stock. Loyalty cards are tending to switch to Visa or Mastercard. These two companies dominate the credit card world and this won’t change any time soon.

This has been a great company. It is certainly not cheap, but that is not the issue, it is the franchise. They have no credit risks whatsoever because they are a toll gate. They are very involved in Apple’s (AAPL-Q) iPay. Great story.

It is going to have a stock split. But these are the stocks you want to buy on a pullback. It’s been on a roll since the end of October. This is why we have corrections. Wait for a pull back of 20%.

Likes this, but doesn’t own it because of valuation. Trading somewhere around 30X PE. There is a real move towards not using cash, but using plastic, and we are still in the early to mid-stages of that. The question is, what kind of correction are you going to see before it takes its next run. He wouldn’t buy at this valuation, but would wait for a correction.

Has been doing well because it has the scale and you are seeing the growth in transactions. It has always been a high multiple stock. She just hasn’t seen a good opportunity to get in recently.

They will be splitting 4 for 1 on March 19. In the past, this used to allow people to come into the market with board lots and buy into lower-priced stocks, but in this day and age, that really isn’t an issue anymore. It will have no economic effect whatever. A very good company and growing close to 20% in terms of earnings. Becoming more international in nature now. Close to 60% of their business is international. About 57% of their business is debit cards. A transaction-based company, so it is all volume which is increasing rapidly. Olympics are next year, and card companies do a lot of advertising and get a tremendous amount of traction on major events.

Likes it going forward. Great growth going forward. It is an electronic payments system. 4:1 split happens March 19/15.

A 4 for 1 stock split is coming on March 19. It doesn’t change the valuation of the business, which is ultimately what drives the stock price. If you are looking to make money on the split; that was already factored in when they made the announcement. Right now this is trading at a little bit of a premium to MasterCard (MC-N), so he is getting close to switching over. They are both great businesses, but are not cheap.

Thinks the card business is great. If he was to recommend one, Discover Financial Services (DFS-N) is coming up strong and would be his 1^st choice. Given that the US consumer is in better shape, you want to be there. This is a good company.

Versus MasterCard (MA-N), this one is a little more North American centric. Because of the tailwind of the higher US$, this has done a little better. Long-term, with Apple pay and the continued growth of mobile payments, these are positive for both companies. Valuations are getting a little bit stretched in the space.

Visa (V-N) or MasterCard (MA-N)? A great sector, but both companies are fairly expensive and priced to perfection, MasterCard a little bit more so. It really depends on the changing way that people pay for things and a complete shift away from a cash society. Regardless of how people pay, security will be a pretty determining feature. He would focus on this one more because it has a larger established base, but being priced to perfection is a problem.

It does not come up on his radar as a value investor, but keep in mind that as energy prices go down there is more money in consumers’ pockets. It should continue to do well.

It surged and continues to. Has done a terrific job. 60% operating margins. A new CEO from 2012. He likes the business very much. 80% of global retail sales are still done in cash. V-N does not yet own Visa-Europe.

US financial service industry has a period of seasonal strength from around the middle of December right through until the end of April. Credit cards have done very well during the recent Christmas period, so look for them to report some pretty good numbers. Technically this looks very, very good. This is the highest priced stock in the industrial average, and has the biggest impact of any stock in the Dow Jones. Technically it is in an upward trend, and if the Dow is going to go higher in 2015, watch this stock in particular because it will be a leader in what happens to the Dow.

A very simple story. A toll booth. 24 times earnings. They have no credit risk. Apple pay really helps V-N because they effectively use it. There is still some good growth globally for this company, especially in emerging markets.