This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Charging Into Visa

Visa currently passes my performance test. The performance is there, at least for now. Will it continue in the future? Of course, nobody knows for sure, but we can look to its current valuation for some valuable clues.

Valuation: When I write articles on Visa, I write about both the performance and valuation of the stock. I am not a pure value investor, nor am I a pure performance investor--I like to combine them both.

There are a lot of seemingly cheap stocks out there that are nothing more than value traps. There are also numerous "hot" performers that are way overvalued that investors need to be careful with.

I like to combine both of these investment styles in the stocks that I invest in.

So now let's look at the valuation of Visa.

Data from Best Stocks Now App

Visa is currently trading at 20.7 times forward earnings. This number sounds a bit rich, but Visa has been growing its earnings over the past five years at almost 30% per year so it is still trading at a discount to its past growth rate.

Furthermore, Visa is expected to grow its earnings by 18.6% per year over the next five years, so it is trading at a PEG ratio of 1.11. This is not an outrageous valuation nor is it the cheapest stock in the world.

When I carry out Visa's earnings estimates over the next five years and I apply a multiple that I think is appropriate for a credit card company, I come up with a valuation of $355 per share. The stock is currently trading at only $182.

Visa currently passes my valuation test.

Stock chart: In addition to performance and valuation, I also like a good, healthy stock chart. When I bought Visa last June, it had a great chart. I am up 45% since that purchase. While Visa has had a very dull chart recently. It has not been bad enough to cause me to sell the stock

And Visa's stock chart is really perking up again!

Courtesy of
3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
V $77.78 -1.20%
AAPL $95.03 -2.90%
FB $116.73 7.20%
GOOG $691.02 -2.10%
TSLA $247.54 -1.60%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs