Continue reading Is American Express' Summer Dip Over?

Is American Express' Summer Dip Over? originally appeared on BloggingStocks on Thu, 19 Aug 2010 14:40:00 EST. Please see our terms for use of feeds.

Visa (V), which competes with American Express (AXP), Discover Financial Services (DFS), and MasterCard (MA), is probably one of the best long-term ideas out there, in my opinion. Credit and debit cards will always play a vital role in the financial culture, and Visa is a top brand in the space.

The equity's 52-week high stands at $97.19. It closed yesterday at $93.61, up a paltry 66 cents, or 0.7%. The stock wasn't rocking into the earnings report, which was released after the bell. And it's pulled back a little from the 52-week high. So what? The one-year chart looks attractive to my eye, and even if it didn't, this is one story I'm fully behind.

Continue reading Visa Performs Well in Q2: Good Long-Term Play?

Visa Performs Well in Q2: Good Long-Term Play? originally appeared on BloggingStocks on Thu, 29 Apr 2010 09:00:00 EST. Please see our terms for use of feeds.

Discover Financial Services (DFS) issued its fiscal first quarter report Tuesday after the bell. According to an article at BusinessWeek.com, a net loss of 22 cents per share was recorded. Last year at this time, the card entity, which counts American Express (AXP) as a colleague, brought in 25 cents per share of positive income.

The quarter's red ink was driven by an addition to loan loss reserves. Without that aspect, Reuters says that Discover brought in a profit of 11 cents per share. Unfortunately, that won't help the company win the expectations game. The estimate at Earnings.com indicates a desired figure of 12 cents for the bottom line.

Continue reading Discover Financial Services Books a Loss in Q1

Discover Financial Services Books a Loss in Q1 originally appeared on BloggingStocks on Wed, 17 Mar 2010 09:00:00 EST. Please see our terms for use of feeds.

Visa (V), a credit card company that competes with American Express (AXP), Discover Financial Services (DFS), and MasterCard (MA), is looking good after the Q1 report, which was released to the market after the bell on Wednesday. GAAP net operating revenue went up 13%. Net income was $1.02 per Class A share, representing a 38% year-over-year increase. According to TheStreet.com, the expectation was for 91 cents.

I simply love this business model. We're a society that is addicted to using credit and debit cards, and Visa takes a little percentage of each transaction. So far, the model is working like a charm. Visa expects prosperous growth in the future, plus a whole lot of free cash flow.

Continue reading Visa's Long-Term Story Remains Valid After Q1

Visa's Long-Term Story Remains Valid After Q1 originally appeared on BloggingStocks on Thu, 04 Feb 2010 09:30:00 EST. Please see our terms for use of feeds.

Continue reading Serious Money: Fortune's 25 leaders, final 4

Serious Money: Fortune's 25 leaders, final 4 originally appeared on BloggingStocks on Fri, 04 Dec 2009 17:00:00 EST. Please see our terms for use of feeds.

Continue reading American Express is in an uptrend

American Express is in an uptrend originally appeared on BloggingStocks on Mon, 16 Nov 2009 18:00:00 EST. Please see our terms for use of feeds.

What's on your Christmas wish list? If the National Retail Federation is right, gift cards are probably holding a respectable place toward the top of the list. These little pieces of plastic are requested most this time of year, and they have the added perk of allowing people to get what they want instead of money wasted on presents that sucks. This trend may give retailers a hand this year, as they'll be able to keep their inventories down.

If shoppers are slow with the cash, retailers won't have to resort to just slashing prices as they had to last year to move product out the door. When the stuff on the shelves is cheap, gift cards aren't as attractive because there's a deal to be had! This year, if inventories are kept down, gift cards are more likely to move.

Continue reading Retailers offering new perks to encourage gift card giving

Retailers offering new perks to encourage gift card giving originally appeared on BloggingStocks on Sun, 15 Nov 2009 14:01:00 EST. Please see our terms for use of feeds.

I've said on many occasions that I prefer MasterCard (NYSE: MA) to Visa (NYSE: V). No, I don't mean the card products themselves. I mean the stocks. I believe Visa has better brand equity associated with it, and I think it possesses a little more depth and fundamental prowess. However, both of these companies operate on the same basic economic model: collect fees on transactions, and don't take on loan risk. So, both MasterCard and Visa do offer compelling long-term investment theses.

And, even though there were some negative outlooks on MasterCard's latest earnings report, which was released Tuesday, I have to say that I didn't find the situation too disturbing. Revenues increased only 2%. The top line was inhibited by currency effects, but it's not like we haven't heard that story before. More importantly, MasterCard posted adjusted income of $3.48 per share, representative of a 40% increase over the adjusted income recorded a year ago.

Continue reading Was MasterCard's Q3 good or bad?

Was MasterCard's Q3 good or bad? originally appeared on BloggingStocks on Wed, 04 Nov 2009 08:20:00 EST. Please see our terms for use of feeds.

Visa (NYSE: V) is one of my favorite businesses on Wall Street. It should be an excellent long-term investment. People will always use branded credit cards, and Visa doesn't take a lot of risk. It simply collects a little of the spoils on each transaction. What a model!

According to TheStreet.com, Visa increased top-line sales by 10% in the fourth quarter, and expanded per-share profit by 28% to 74 cents, excluding certain items. Forecasts were for 72 cents per share.

Continue reading Visa charges through Q4 estimates, but future cash flow is the story

Visa charges through Q4 estimates, but future cash flow is the story originally appeared on BloggingStocks on Wed, 28 Oct 2009 08:30:00 EST. Please see our terms for use of feeds.

Discover Financial Services (NYSE: DFS), a credit card company that competes with Visa (NYSE: V), MasterCard (NYSE: MA), and American Express (NYSE: AXP), released earnings for the third quarter on Thursday. The company put analysts to shame by posting a profit instead of a loss according to an article from Reuters.

The projection was for a loss of 12 cents per share. Discover actually made 52 cents per share of profit, once you exclude monies received from an antitrust settlement. Wow, that's what you call being way off the mark! The disparity surprised me, so I went to our very own earnings preview to see what we were reporting for an estimate. Sure enough, it stated the exact same expectation for a loss of 12 cents.

Continue reading Discover surprises analysts in Q3

Discover surprises analysts in Q3 originally appeared on BloggingStocks on Thu, 17 Sep 2009 15:00:00 EST. Please see our terms for use of feeds.

American Express Company (NYSE: AXP), a company that competes with Visa Inc. (NYSE: V), MasterCard Incorporated (NYSE: MA), and Discover Financial Services (NYSE: DFS), issued Q2 results earlier in the week. Earnings from continuing operations dropped very steeply to 9 cents per share. How steeply? Well, the per-share profit lost 84% of its value this time around. However, it might make you feel a little better to know that 18 cents can be added back, since that was the net worth of repurchase activity relating to preferred shares from the U.S. Treasury department. Therefore, American Express took in 27 cents per share from continuing activities. According to this Reuters piece, that number met expectations.

The Reuters article also points out that revenues fell by 18% and that net charge-offs increased. Not a great picture. Reading through the press release, an investor might come away with a feeling of dread. Management mentions the not-so-strong spending by its cardmembers and the fact that loan losses are at historic levels.

Continue reading American Express not on my watch list after second-quarter data

American Express not on my watch list after second-quarter data originally appeared on BloggingStocks on Fri, 24 Jul 2009 18:00:00 EST. Please see our terms for use of feeds.

Shares of American Express (NYSE: AXP) bottomed in early March at just over $10 per share.

Instead of covering, I hedged my bet by keeping the American Express short open. I suppose that is the entire point of absolute return investing, but boy, was I wrong in doing that.

AXP shot up like a rocket over the last three months and now trades above $23 per share. It has been a big gainer this year, returning 25% through the end of the second quarter.

Continue reading Stock to avoid #10 -- American Express (AXP)

Stock to avoid #10 -- American Express (AXP) originally appeared on BloggingStocks on Sun, 19 Jul 2009 14:00:00 EST. Please see our terms for use of feeds.

With such uncertainty, following an absolute return strategy continues to offer investors the biggest bang for their buck. There is no sense in guessing where the market will be down the road.

Instead, buy cheap stocks and sell stocks that are expensive. Then blend the two approaches together in one portfolio and chances are you'll make money.

Even with a huge rally in stocks, the S&P 500 ended the second quarter with a year-to-date gain of 1.78%. That is a vast improvement compared to the 11% loss at the end of the first quarter, but it's a minimal return for taking risk in the stock market.

Investors need to do better -- and they can.

Continue reading Take a pass on these ten stocks

Take a pass on these ten stocks originally appeared on BloggingStocks on Sat, 18 Jul 2009 08:00:00 EST. Please see our terms for use of feeds.

If you read the actual press release, you'll see that Discover, on a reported basis, made $0.43 per share. However, we must remember that this profit included an antitrust settlement sourced to Visa and MasterCard. So, once you get rid of that money, you come up with a loss for the quarter.

Continue reading Discover Financial Services beats in Q2 -- buy the stock?

Discover Financial Services beats in Q2 -- buy the stock? originally appeared on BloggingStocks on Thu, 18 Jun 2009 13:50:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Profit taking to hibernating bulls (ANF, AXP, BBI, DRYS, NKE, YHOO)

Closing Bell: Profit taking to hibernating bulls (ANF, AXP, BBI, DRYS, NKE, YHOO) originally appeared on BloggingStocks on Fri, 15 May 2009 16:00:00 EST. Please see our terms for use of feeds.

Continue reading Credit card crash: Small biz lender Advanta in trouble

Credit card crash: Small biz lender Advanta in trouble originally appeared on BloggingStocks on Tue, 12 May 2009 14:50:00 EST. Please see our terms for use of feeds.

Visa (NYSE: V), whose colleagues include American Express (NYSE: AXP), MasterCard (NYSE: MA), and Discover Financial Services (NYSE: DFS), reported a Q2 profit on Wednesday that was surprisingly strong. On an adjusted basis, earnings came in at 73 cents per share. Analysts were banking on only 64 cents per share, according to Reuters.

Quite frankly, I can see the disparity between Wall Street's thinking and the ultimate reality. I mean, the economy has been bad (to state the obvious), and people aren't spending as much. This means that they aren't using their credit cards like they used to. Ergo, you might expect Visa to post a lower number.

Continue reading Let's give Visa some credit for its Q2 performance

Let's give Visa some credit for its Q2 performance originally appeared on BloggingStocks on Thu, 30 Apr 2009 09:30:00 EST. Please see our terms for use of feeds.

Continue reading American Express (AXP) soars on strong Q1 earnings

American Express (AXP) soars on strong Q1 earnings originally appeared on BloggingStocks on Fri, 24 Apr 2009 12:00:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: When 'less-bad' starts looking great (AXP, DNDN, GM, SIRI, SBUX, YHOO)

Closing Bell: When 'less-bad' starts looking great (AXP, DNDN, GM, SIRI, SBUX, YHOO) originally appeared on BloggingStocks on Wed, 15 Apr 2009 16:20:00 EST. Please see our terms for use of feeds.

"What can get this market going again?" asks Chuck Carlson. In The DRIP Investor he says, "It's helpful to understand what stocks within the Dow need to do well for the index to do well."

"Not surprisingly, IBM (NYSE: IBM), the highest-priced stock in the Dow, carries the greatest weighting at more than 9% of the index. Obviously, with such a heavy weighting in the index, IBM will need to be a decent performer for the Dow to do well going forward.

"And when you total up the exposure of IBM with the other tech stocks in the Dow - Microsoft (NASDAQ: MSFT), Intel (NASDAQ: INTC), and Hewlett-Packard (NYSE: HPQ) - the total tech weighting in the Dow is 16%. Thus, tech stocks matter to the Dow, so it is diffcult to see the Dow sustaining a move upward without a nice rebound in the tech sector.

Continue reading What will move the Dow? A look inside the average

What will move the Dow? A look inside the average originally appeared on BloggingStocks on Fri, 06 Mar 2009 15:20:00 EST. Please see our terms for use of feeds.