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Note: The author currently holds positions in Visa stock ($V).
FOR SOME ODD REASON I never gave Visa, Inc. a second look when it came to buying its stock. But, my outlook has changed.
Perhaps, in the back of my mind I always thought the stock was a bit overpriced to invest in for the long run. Plus, I’ve had bad memories about Visa when I racked up my Visa credit card years ago. But, since then I’ve paid off all my credit card debt.
So, why not invest in Visa? I guess you could look at the company negatively as a credit card company who’s sole purpose is to tempt consumers into buying things when they don’t have the cash, so they can forever be in debt. But, as a company it is a highly successful one. Millions of people use their Visa cards everyday, and as long as you are in control of your spending habits, a credit card is useful in the event of a financial emergency.
But focusing on Visa, Inc. solely as a corporation in the business of generating profits, let’s look at 5 simple, yet compelling reasons to invest in Visa stock.
1. The 5 Year Chart
Visa’s 5 year chart looks impressive. The first dip is the 2008-09 Financial Crisis, but the stock bounced back strongly, and overall has followed a strong path upwards.
2. Outperforming The Dow and S&P 500
Looking at the above 1 year chart, Visa ($V) has outperformed $SPY (S&P 500’s EFT) and $DIA (Dow Jones Industrial Average’s EFT). The marginal difference is quite significant.
3. The 6 Month Chart
Visa’s 6 month chart looks quite impressive as well. Notice the purple-dotted 200 day moving average and how it’s uptrending. And the 7 day exponential moving average seldom crosses below the 30 day simple moving average, which is a good sign. Volume and momentum is strong.
4. The 2 Week Chart
Looking at the 2 week chart (and investors know that the 2 weeks AFTER the presidential election was one big downtrend), we see the 7 day exponential moving average fall below the 30 day simple moving average, but only to rebound in a significant way. The 100 day moving average is in a gradual uptrend, and the 7 day and 30 day moving averages are climbing up the chart pretty strongly.
5. Overall Performance, Especially During the Holiday Season
Visa Inc., the $98 billion large-cap powerhouse, manages the largest global payment system in the world. This bodes well for the current Christmas/Hanukah shopping season and lasts throughout the year as millions of payment transactions take place.
Let’s face it, shoppers are going to be using their credit cards once again this Holiday Season. It’s a fact of life, especially given that many are experiencing the budget crunch when it comes to the continued rising costs of gasoline and groceries.
This article drives the point across, and makes it clear that Visa has been a successful company and the odds are great that it will continue to be successful into the future.