Visa never had a PE so low, i think it would be better to see whats the historical mean PE and the lowest PE that Visa ever had than just throw a 14 PE on every company. For example, Pepsi never had a PE under 20, only in the 08/09 crisis but at that time, everything was cheap
Comparing PE from different sectors would not work...in any case we prefer to keep our 5 years average PE and work from there. Thanks for the note - 👍GC
@@EverythingMoney I think his point was to compare the historic average PE of that company. If VISAs average PE over the life of the company has been 25 then 14 seems unrealistic because VISA has never traded close to a 14 PE ever.
@@carloscabrera8510 i personally don’t like comparing historical pe’s to current pe’s or futures. because the company will be bigger in 5-10 years. and being conservative isn’t comparing future growth from past history🤷🏼♂️
@@EverythingMoney if comparing PE from different sectors does not work than assigning a PE of 14,16,18 to every company regardless of sector or moat or brand does not work either..
More than 15 years having an average PE ratio of 33. Why not, lets put 14-16-18. Makes totally no sense using fixed multiples not taking in account the quality of bussines. Why use 15 PE for an horrendous bussines and the same on visa having a gross margin of 80%, operating margin of 40%, enormous MOAT , huge ROIC... . Everyone estimate 10-13% annual growth, lets use 6%!!! you are already using margin of safety on 12.5% return, using it aswell on all metrics is just an overkill and a perfect way to never buy awesome companies. Margin of safety is the key of value investing, but you need to apply it once, not multiple times.
Feel free to change your assumptions, anyone can pick them as they see fit. We are happy with our 'ridiculous' criteria 😉that is why we don't overpay for growth - 👍GC
They always do this. Doesn't matter what phase the company is in. Infancy, hyper growth, mature literally doesn't matter to them. Same cookie cutter metrics on any business in any industry at any point in the company's history.
My issue with this analysis is that Visa's PE ratio hasn't been below 20 since 2010. It could definitely be a buy with a PE of 22 when you consider that 80% of transactions globally are still done with cash and their growth and RIOC is so consistent
Honestly i agree V is overpriced, i bought around 220. But V is a blue chip company with always amazing results, my portfolio needs to contain different sectors and company, i am willing to pay more for a mother company like this one. Good video guys
You said once the stocks you buy won't have these crazy falls like many hype stocks do .. -Meta Plattforms almost cut in half - Baba needs no explanation -Smith Wesson cut in half from ATH -Sleep Nr over 30%
Yes we also said we buy stock in value when there’s bad sentiment , that will make the price keep on falling until it turns it around , and we also said we wait 5 to 10 years to sell this stocks .AP
New to this channel, would like to understand: The analyzer says Visa $90 a share. Is that something we should be expecting? At the low of the pandemic it hit $148. So is a 40% decline from that low a realistic expectation? Are the saying that is something that will happen and they won’t buy unless it hits $90?
We are not saying that it will happen , we are saying that is a safe number to buy for very cheap , to make 12.5 % per year for 5 to 10 yrs .\ Because if you buy now you will overpay for it , and you need to do over 11% a year in order to beat the market .AP
Personally I am currently more interested in American Express with its current valuations. Paying less per revenue and FCF, seems like it has a lower dividend but I guess it gives them an opportunity to invest more in expanding their payment network and they are an actual card issuer which gives them an advantage when it comes to rewards. Honestly as a fan of credit card rewards programs I haven't found a better and more flexible program then AXP. The one thing that worried me is the significantly higher amount of debt compared to VISA. Could you please do an analysis comparing the main 3 payment networks: VISA, AXP and mastercard?
In India,UPI is eating into the profits of VISA ,as the UPI network has penetrated into rural areas .The UPI implements these transactions without the commissions and hence becoming a fierce competitor to VISA.Many asian countries like Singapore are planning their integration of their financial system with India's UPI network for using the boons of UPI. Google has asked the Federal Reserve in US to implement UPI like financial network in US as they have an app called GPay that runs in UPI network in India. It would be good if you could research on this topic and let us know your perspective regarding this financial network,Paul, considering this as a disruptor to the Swift and VISA network.Thank you for reading my long comment
i dont understand the p.e. assumption on visa, into your calculator, visas lowest p.e. is 22.15 on dec of 2011 and only goes up from there why guess 14 15 17?...half?...
Reading about people grabbing multi-figures monthly as income in investments even in this crazy days in the market, any pointers on how to make substantial progress in earnings? Would be appreciated.... I'll be in the comments
I LOVE this stock! i'm buying the dips. It gets used EVERYWHERE now, as shops are NO LONGER wanting to use cash, (cash is old and smelly) Average in and find when it's on CHEAP!
@@sydneysimoes1903 indeed, but if you see a rally with this stock, you can set up some stop losses in the green as it goes up. when you hear about a crash the stop losses will trigger, and then you can find it at it's best value. Bear in mind inflation is HAMMERING your buying power. So you may have bought on a up trend only to witness a market crash years later, but you bought so long ago its unaffected.
@@cousinmerl i rather just buy companies at a price that’s under valued. patience is key in investing. you don’t need to buy all these companies and hope they only go up. goodluck
My only argument is that we are still not done with this endemic. More travel and more money to be spent in the future even or especially with inflation
Visa with a PE of 14? This is my problem with everything money... you sit there and wait to buy these stocks for their recommended "buys' and you very well are never going to own 99% of these stocks. they don't trade that cheap.. using historical PE average PER stock is important, and why this blanket analysis is so flawed.
Don’t worry about Pauls number , concentrate on what you think are the right numbers to purchase visa or any stocks , those numbers are for him , and the ones looking for value .AP
Love the channel guys, was wondering you guys could do a segment on recreational marijuana businesses? Seems to be a growing sector. Would love to see you guys do Canopy Growth corporation! Thank you
@@EverythingMoney he says at 8:02; "if you pay 90 dollars a share for them, if the assumptions come true, you are gonna make 12,5% on your money". Is that meant as in 12,5% every year for the next 10 years? or is it 12,5% over 10 years.
PE of 14 or16 for a 50% Net Margin business is not very likely. If there were such a massive multiple contraction, VISA would be some kind of a value trap. This kind of blanket analysis with zero nuance und fixation on valuation will lead to a portfolio filled with value traps.
And its ok if its not very likely , thats just HIS numbers for him to say ok am interested am going to look more . Your job is to put your numbers on what you think the future is , and based on those assumptions you are going to get your purchase number .AP
Its been my observation looking at charts this year on many companies even good value ones that if you go back to 2019....most have risen way to high. That being said I feel a true correction will lower all stocks to above 2019 but a reasonable percentage. What % not sure but would track on a incline going back to highs over last 3 to 5 years. Providing the company still has room to grow in its market area.
