I've increased significantly on my position in Visa (V) today during its monster dip in the morning @ $79. Coming off a $12 dollar pullback I think this is now the point where we can start building position for the future. I am a dip buyer now on any further pullbacks. I think the stock will hit $100+ within the next couple months. ~22% return isn't too shabby at all. And as I've stated before in a previous post - I used to be a former employee of Visa and I truly believe in the company's prospect. Visa have been doing some major restructuring lately and all of this should help the company streamline its business and increase its revenues even more. Let's see what happens.
Besides that, I haven't done much this morning. The markets are now in a see-saw pattern. Up one day, down big the next, then rebound. Cycle repeats.
I am still waiting on apple to take a hit before I jump in again.
PWRD...the stock shaved a dollar off its highs today...With the Earthquake in China that struck over the weekend I'm wondering will that have any affect on the Chinese ADR's? Have to do some quick constructive thinking to decide if i want to put on a short position again.
Disclosure:
Long GOOG, V
Short USO
UPDATE 1:
I am setting up triggers to short PWRD @ $31. This is where both the 20 and 50DMA is at and because the stock is now retracing back up on very light volume it makes me believe it is setting up perfectly for the next leg down.
Note this is a 4 day chart.
4 comments:
xman,
how do you evaluate V in terms of growth? I assume V and MA will grow at about the same rate (eps % increase wise). If V has 7x the shares outstanding as MA, and MA is at 290...should V's price be at around 40? Wondering how people assess what a company is 'worth'...more importantly, why some companies have room to blow up.
u da x-man!
I was under the impression V rebounded/rallied (back on apr 28th) mainly from MA's earnings. I think MA is the superstar story here. I'm sure Visa will do well in the years ahead though.
monkies,
shares outstanding for V compared to MA is about 6.5x
My opinion is V will not fall below its IPO price, which is where your 40 target is. A price of 40 dollars in visa would equate the company to being less than 33 billion, that's even smaller than MA. If we are to factor in the fact Visa is already twice the size of mastercard it would already put the stock at 80 dollars (which is where we are at now), and then factor in the prospect of growth in popularity from paper to plastic, the undiminished spending power overseas, this should continue to get visa going higher. This company has room to blow up because it is one of the most well known companies in the world that is synonymous with spending money. If you have a credit/debit card, more than likely you will have an affiliation with visa.
hahighbaby,
The gap MA needs to fill is simply too big. It has made too big of a move up and now it is very far away from any major support. First line would be at $260. I would be very very cautious committing money to them for the time being.
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