More on the much ballyhooed Visa IPO
March 02, 2008
– Comments (3) |
RELATED TICKERS: V
, MA
Kiplinger has an article on the Visa IPO: http://www.kiplinger.com/columns/picks/archive/2008/pick0227.htm
they expect Visa to start with a P/E of 25, which is the same as Mastercard's current P/E. so, if you feel Mastercard is a buy at this price, Visa could be a buy as well. their business models are similar. Visa is in fact the bigger network. MA is expected to achieve about a 20% growth rate as more people around the world start to use plastic, and one could expect the same of Visa.
Pat Dorsey of Morningstar gives his thoughts at the end of this video: http://link.brightcove.com/services/link/bcpid1184614598/bctid1438427059
Dorsey reminds us that the people who own Visa right now are large US banks ... many of whom need money due to missteps elsewhere. they are motivated sellers, who are willing to sell in a less than ideal market.
Josh Peters, who runs M*'s Hare portfolio, says the shares look to be undervalued enough to keep him interested, but he doesn't expect buyers to be able to qunituple their money as with Mastercard. in fact, M* has MA about near fair value right now. remember, when people are looking at the Visa IPO, they're thinking Mastercard. for reasons I've outlined, I doubt very much that people are going to 5x their money in 18 months. however, if Morningstar has Visa at 5 stars, I would buy. I do not expect either V or MA to sustain permanent impairments to their businesses even if there is a prolonged global recession.
of course, it's a question as to whether Visa will start at or hit a consider buying price. I believe Morningstar has their credit card analyst working on Visa, and they expect a more detailed report out next week.
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