Visa shares pullback gets attention
Source: http://thestockmasters.comPosted on Tuesday, May 27th, 2008 | In Current Market News, Stocks to Watch
The greatest IPO of 2008, Visa Inc. (NYSE:V) is a story of the ages. Visa shares hit $89 this month but have since fallen to $75. Visa shares are down almost 14% since the high, so could this be the entry point we have been waiting for?
Masters, here is the latest buzz:
Via StreetInsider.com:
Following the initial surge in Visa’s stock price after its IPO on March 19, which also created upside in shares of MasterCard, the two credit card company’s have since pulled back from record highs: shares of Visa moved as high as $89.84 (on May 7) just a day after MasterCard broke the $300 level, but both stocks have fallen about 9% from these levels.
Considering each company’s RSI (relative strength index), Visa and MasterCard seem to be moving to their most unfavorable levels since Visa went public. Visa’s RSI has moved to about 47, meaning it is relatively oversold compared to where this technical indicator has been, while MasterCard’s RSI has dropped from 85 at its 52-week high to 54 today, implying similar technical trends.
Traders often use indicators such as the RSI to determine if a trend is likely to continue. With a recent decline in positive market sentiment about these two popular stocks, could the RSI be signaling a new trend to the downside or an attractive entry point for investors predicting a continuation of an uptrend?
Via http://notablecalls.blogspot.com/
Visa (NYSE:V): 2009-2010 ests raised to new Street high at SunTrust
It is firm’s view that most analysts have been unwilling to boost their growth forecasts for Visa as the company gave markedly conservative guidance during the IPO process and did not alter its long-term growth objectives following impressive 2Q08 outperformance. Further, while MasterCard has been public for two years, and has consistently posted organic revenue and earnings growth well ahead of its long-term goals, Visa has only beaten expectations for one quarter.
As a result, they believe analysts’ MasterCard estimates are closer to reality than their Visa projections. This has created a situation in which V appears to have a valuation comparable with MA on EBITDA and higher on EPS. They believe the opposite is actually true, however.
Notablecalls: I think this is a pretty major call from SunTrust. I don’t know how many of you remember but SunTrust was out on Mastercard on June 15 2007 with a hefty EPS raise (one that pretty much triggered another round of EPS raises by other firms).Same thing may be happening with Visa here. Note that SunTrust’s EPS ests for 2009-2010 are the new Street high.
Technically, the stock looks ready for a nice bounce.
Fellow Masters, we love Visa and would like to see shares fall even further. It’s time to add V to your watch list.
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May 27th, 2008 at 8:50 pm
I agree totally with this article and have been buying all the way down adding 15-25 shares every time Visa drops 3 or more percent. I think this strategy can pay off in the long run. ANY opinions?
May 30th, 2008 at 12:06 am
Wish i had bought during the dip 30 shares but instead i used the little left in my account to buy some solar stocks last week that have been losing big time since oils drop lol Have lost$300 while i would be up $300 on Visa by now..I just wish i hadn’t bought and sold MA when it was low and ended up with 34 less shares over all damnnn that is a 10K loss of profit at $300+
Wish i had bought more MA when i first started..almost everything else i bought is stil lower then it was 2 years ago lol