MarketWatch.com - Pre-Market Indications

Thursday, March 20, 2008

st0ckman's visa ipo analysis

Visa at:

$42, that would put it at PE at 26.6,
$44, that would put it at PE at 28,
$50, that would put it at PE at 31.6,
$55, that would put it at PE at 35,
$60, that would put it at PE at 38,
$65, that would put it at PE at 41,

MA was offered and opened at PE of 15 at $39 IPO and today's price of
MA is at PE of 26, which puts Visa at par with MA at $42, given they
have same earnings.

DIRECT COMPETITOR COMPARISON

MAAXPDFSPvt1Industry
Market Cap:27.33B48.56B7.28BN/A132.24M
Employ­ees:5,00067,70012,800N/A51
Qtrly Rev Growth (yoy):27.80%12.40%4.60%N/A16.30%
Revenue (ttm):4.07B31.45B4.10BN/A110.01M
Gross Margin (ttm):100.00%44.16%100.00%N/A39.62%
EBITDA (ttm):1.23B8.89BN/AN/A14.65M
Oper Margins (ttm):27.83%26.21%32.58%N/A0.27%
Net Income (ttm):1.09B4.05B588.63MN/A-386.67K
EPS (ttm):8.0023.3551.229N/AN/A
P/E (ttm):26.0412.5212.37N/A18.08
PEG (5 yr expected):1.511.111.66N/A1.17
P/S (ttm):6.721.541.78N/A1.64
AXP = American Express Company
DFS = Discover Financial Services
Pvt1 = Visa Inc. (privately held) *****this has to be updated****
Industry = Business Services

VISA Inc.

(NYSE: V)


Last Trade:56.50

last trade on 3-19-08 v's first day trading.


-keep in mind that people with pre market shares usually dump them for an immediate profit. these sellers need to be washed out of the market. this is one of the reasons master card did not do well right away. master card also did very well because it came out with a pe of 15 then the stock went down which also decreases the pe ratio bringing more value into the stock. as of the close yesterday the stock has a pe ratio of roughly 36, the highest pe in the sector. as a value play the stock is expensive. keep in mind the average pe on the dow jones is 14.27.

DOW JONES AVERAGES INDEX FUNDAMENTALS

Index
P/E (Incl. Negative)
P/E (Excl. Negative)
P/Book Value
Div. Yield
P/Sales
P/Cash Flow
Trailing
Projected
Trailing
Projected
Industrial Average
14.27
12.60
14.01
12.60
3.31
2.57
1.06
16.14
Transportation Average
14.73
13.88
14.73
13.88
2.16
1.42
0.79
8.34
Utilities Average
15.30
14.21
15.30
14.21
2.05
3.39
1.34
6.84


visa is seen by some(video below) as a hedge against a recession or a weak economy because visa charges per sale, they do not finance and people use their cards more in tough times.

lets not forget the markets are in a down trend and in very bad shape. as many of you know i am expecting a major crash in the markets world wide.

keep an eye on the highs and lows and of course the trend. i would not go long this stock with out a option hedge. because of v's price to earnings ratio this is not a master card mirror. dont get me wrong it could do very well. ide just sit on the side lines for now. subscribe to my blog for updates. you can subscribe with any reader or your email.



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