Wedgewood Partners’ CIO says Visa Inc (NYSE: V) is a promising reopening stock a day after the financial services company reported record revenue for its fiscal first quarter.
Rolfe’s bull case for Visa Inc
Visa reported a 40% YoY increase in its quarterly cross-border volume last night that David Rolfe sees as a positive catalyst for the stock. This afternoon on CNBC’s “TechCheck”, he said:
Now that the world is opening up post-COVID-19 pandemic, the all-important cross-border revenues are coming back. On top of it, it’s a stock that’s trading at 28 times this year’s earnings and about 24 times 2023. Probably one of the most dominant business models in the world.
His outlook is similar to Gradient Investments’ Jeremy Bryan, who also expects 2022 to be a great year for Visa. The stock jumped nearly 10% this morning and wiped its entire year-to-date loss. A double-digit single-day gain is fairly unusual for Visa; seen last in April 2020.
Fintech startups are not a threat for Visa
The chief investment officer does not see the rise of fintech solutions as a threat for Visa, which is now a sizable position for his investment management company. He added:
The narrative that Visa is going to lose market share versus some of these startup fintech companies just isn’t the case. These companies are partners; they ride on Visa’s rails. Square, PayPal, Coinbase, Strip; they are all partners.
Rolfe agreed the stock was a bit on the pricier side last year, but said it’s not anymore. “V” traded at a high of about $250 in July 2021 versus $222 at present. According to Rolfe, Wedgewood Partners has been loading up on “V” in recent weeks.
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