Why to invest in Visa Inc.

Aug.18, 2008 in News & Ideas, Stocks

As of right now Visa is sitting at about 74.45$, which I think is a steal! Most people are staying away from it because of the current credit crisis. What most people don’t know is that Visa does not issue credit but is paid on a per transaction basis. Now, there are quite a few reasons Visa is a buy right now. With Visa’s massive Olympic sponsorship they are poised for growth in the developing nation of China, where credit is just becoming a regular occurence. The number of transactions that will soon be available to Visa through the 1.3 billion people in China will be astonishing. Last year alone Visa had 144 Billion transactions and the growth of transactions is set to increase in double digits for the next 5 years! So why not go out and buy Mastercard Inc. you say? Well Visa is the big boy with over 52% market share and as Jim Cramer says “Buy the best of breed!”. What most people overlook about this stock is that Visa is split into two companies. Visa Inc, which mostly makes it money off the American transaction market, and Visa Europe. There is speculation that Visa Europe could be sold to Visa Inc and if this happens the stock would be a global powerhouse for years to come. Even with a great last quarter the stock has pulled back and with resistance on the stock at 73 dollars, this makes Visa a major BUY!