Charged up over Visa (V)
"Visa (NYSE: V) is a solid big cap play with strong profits," says Leo Fasciocco, a technical expert focused on "breakouts". In The Ticker Tape Report, he looks at the credit card processor.
"The stock's 12-month performance chart shows Visa appreciating 55% compared with a 28% gain in the S&P 500 index. So, for a big cap play V has done very well.
"V's daily chart shows the recent advance from 60 to roughly 80. The stock set up a flat base, well above its rising 50-day moving average line. A recent gap move higher on expanding volume is very bullish.
"The stock is within range to top its all-time high of 89.84 set in 2008. If it can do that, the stock could draw in more buying from the new-high crowd. The stock got a boost recently fromR. W. Baird which set a target of $100.
"The key to V is the potential end to the recession. That would mean a revival of consumer buying which would help V's business. The company is a consistent 20% earnings growth play. That is very good for such a big firm.
"V's net for the upcoming fiscal first quarter ending Dec. 31 should rise 16% to 91 cents a share from 78 cents a year ago. We see good chances for an upside earnings surprise. The past four quarters, Visa has topped the consensus by 12 to 3 cents a share.
"Net for the fiscal year ending September 30, 2010 is projected to increase 23% to $3.58 a share from $2.92 a year ago. The stock sells with a price-earnings ratio of 23. That is reasonable. Going out to fiscal 2011, analysts project a 21% gain in net to $4.32 a share from the anticipated $3.58 in fiscal 2010.
"Institutional sponsorship is excellent. The largest fund holder is 5-star rated Fidelity Contrafund with a 1.8% stake. It was a recent buyer of 325,300 shares. The largest buyer recently was GMO Quality III Fund, 5-star rated, which purchased 2.2 million shares. V has 843 million shares outstanding.
"We are targeting V for a move to 105. A protective stop can be placed near 80 giving the stock some room. We rate Visa a very good intermediate-term play for conservative investors."
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