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TheStreet Open House

VeriFone Can't Pay Forever

Stocks in this article: PAY TGT WMT COST AAPL EBAY INTU NCR INGIY AXP C

NEW YORK (TheStreet) -- With shares soaring 90% over the past nine months, you will have to look far and wide to find a stock hotter than VeriFone (PAY - Get Report). This company has paid off handsomely for investors but as with all good things, it may be time to cash out.

While VeriFone certainly looks to be in much better shape under new management, the company's stock has also benefited from non-organic events.

The recent data breach endured by Target (TGT) has shed some light on the importance of point-of-sale security. This unfortunate event compromised information from an estimated 70 million people. Investors believe VeriFone might be the solution. That company has experience with various PIN and chip cards that are a global standard for operating POS terminals and ATM machines. EMV is also a security standard for authenticating credit and debit card transactions.

Not surprisingly, given Target's data breach shares of VeriFone are up close to 25%. The company is seen as being in the right place at the right time. And to think, nine months ago VeriFone was left for dead on rumors that Apple (AAPL) was planning to enter the mobile payment system. But these rumors haven't gone away.

Although new CEO Paul Galant seems eager to transform VeriFone's hardware-centric business to more of a software/services oriented model, the industry is changing faster than the company can execute the change.

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