New Trade for August 14th 2020

Major U.S. indices are mixed this morning with tech heavy Nasdaq alone in the green.  The S&P 500 closed yesterday at just 0.6% below its all-time intraday high set on Feb. 19.  It is possible that we could see a new record today, if the current shifts.  The S&P is set for a lower open this morning, so that seems unlikely.  

Will stocks continue to climb past pre-coronavirus highs in the coming weeks?  There are convincing cases from analysts on both sides of the outlook.  For now, the congressional stimulus stalemate could keep markets in a holding pattern until more positive news surfaces.  

If you’re looking to beef up the financials portion of your portfolio, we’ve got a long-term winner that’s made solid gains over the years.  Looking ahead, international expansion could mean huge returns for YOU over the coming years.  

Between 2008 and 2018, Visa (NYSE:V) expanded its share of credit card based network from 42% to 53%.  As the clear cashless choice among merchants in the U.S., Visa has had little trouble growing its bottom line by a double digit percentage year after year.  

In 2016, Visa acquired Visa Europe.  From here, there’s plenty of opportunity to expand into Africa and the Middle East and continue growing its business.   

V shares are currently trading at ~6% lower than it’s pre-covid high.  There could be more pain for V stock over the coming quarters, as the U.S. and global economy navigate through a COVID-19 induced recession.  But Visa has proven that it’s more than capable of delivering superior returns to its shareholders more years than not. 

 Since Visa is a company that focuses solely on the payment side of the equation, it’s not affected nearly as much when loan delinquencies begin to rise.  That’s a big reason its profit margin is usually above 50%.  Long-term investors may want to consider taking a position in V stock at these levels.  


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