Visa Inc (NYSE: V) is a perfect example of what you call “quality at a reasonable price” and that’s a reason enough to be long this stock, says Malcolm Ethridge – the Executive Vice President of CIC Wealth.
Ethridge’s bull case on the Visa stock
Shares of the financial services behemoth are trading at their pre-pandemic price at writing. But at that same price, Ethridge noted on CNBC’s “Fast Money”, the multinational is way more attractive now than it was about three years ago.
[Visa] is a quality company with solid financials that has sold off so much that it’s giving us a chance to buy at pre-pandemic levels but with tech improvements and other upgrades made to its payments network in the last two plus years.
Its fortress of a balance sheet with about $18 billion in free cash flow, relatively low debt, and continued double-digit earnings growth were among other reasons cited for the constructive view.
Last month, Visa reported market-beating results for its fourth financial quarter as payments volume approached nearly $3.0 trillion. Visa stock is currently down over 10% versus its 52-week high.
Visa could benefit from the FTX fiasco
Ethridge is not entirely sold on the narrative that consumer spending will come down meaningfully moving forward. So far, expectations are also for the consumer to keep resilient this holiday season.
As far as they’re using their cards, Visa gets to make money even if they’re trading down, he added. More interestingly, Ethridge expects Visa Inc to be a beneficiary of the recent, much talked about collapse of FTX that we covered here.
Visa has also recently filed trademarks related to a crypto wallet, which, given FTX and Block Fi, may mean that they end up longer term with a whole new set of customers that come in looking for a safer place to hold that crypto.
His bullish view is in line with Wall Street that also recommends buying Visa stock here.
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