Qiwi Plummets to Two-Month Low on Russian Regulations

NEW YORK (TheStreet) -- Qiwi (QIWI) shares saw double-digit losses on Wednesday on news of tighter Russian regulations on cross-border payments. By late morning, shares had plummeted 18.4% to $44.06.

The payment services provider tumbled on Kommersant reports Russian regulators are considering restricting the movement of cross-border electronic funds. The Russian newspaper said newly drafted laws could limit anonymous domestic e-funds payments and ban anonymous cross-border payments in a move to curb terrorism and money laundering.

If passed, the laws would prove a challenge to the Cyprus-based Qiwi which owns and operates internet-based ATMS in Russia and the Commonwealth of Independent States.

Shares hit their lowest level since November 2013 and saw their biggest drop since the company's IPO in May.

Competitors Visa (V) and The Western Union (WU) were unaffected by the news, up 0.67% to $224.15 and 0.12% to $16.54, respectively.

TheStreet Ratings team rates VISA INC as a Buy with a ratings score of A. The team has this to say about their recommendation:

"We rate VISA INC (V) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 22.8%. Since the same quarter one year prior, revenues slightly increased by 8.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • V has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, V has a quick ratio of 1.59, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for VISA INC is rather high; currently it is at 62.46%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 40.09% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $2,045.00 million or 49.37% when compared to the same quarter last year. In addition, VISA INC has also vastly surpassed the industry average cash flow growth rate of -13.17%.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the IT Services industry and the overall market on the basis of return on equity, VISA INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

TheStreet Ratings team rates WESTERN UNION CO as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate WESTERN UNION CO (WU) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • WU's share price has surged by 27.69% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WU should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Despite the weak revenue results, WU has outperformed against the industry average of 22.8%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • 47.11% is the gross profit margin for WESTERN UNION CO which we consider to be strong. Regardless of WU's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 15.21% trails the industry average.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the IT Services industry and the overall market, WESTERN UNION CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $333.40 million or 19.44% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, WESTERN UNION CO has marginally lower results.

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