Visa's most recent trend suggests a bearish bias. One trading opportunity on Visa is a Bear Call Spread using a strike $180.00 short call and a strike $185.00 long call offers a potential 5.93% return on risk over the next 3 calendar days. Maximum profit would be generated if the Bear Call Spread were to expire worthless, which would occur if the stock were below $180.00 by expiration. The full premium credit of $0.28 would be kept by the premium seller. The risk of $4.72 would be incurred if the stock rose above the $185.00 long call strike price.
The 5-day moving average is moving down which suggests that the short-term momentum for Visa is bearish and the probability of a decline in share price is higher if the stock starts trending.
The 20-day moving average is moving down which suggests that the medium-term momentum for Visa is bearish.
The RSI indicator is at 40.37 level which suggests that the stock is neither overbought nor oversold at this time.
To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here
LATEST NEWS for Visa
How Bad Has Global Travel Been Hit? American Express Should Provide Some Clues.
Sat, 14 Mar 2020 00:41:00 +0000
The big credit card company will offer guidance this week. Up to now it’s been upbeat. But with the pandemic raging, that may change.
Wait for the Fears of Coronavirus to Clear Before Buying Visa Stock
Fri, 13 Mar 2020 18:03:57 +0000
U.S. stocks have plunged nearly 20% in about a month on fears that the coronavirus from China will materially slow economic activity and could tip the global economy into a recession. Very few stocks are being spared in this selloff. Even traditionally strong payments stocks like Visa (NYSE:V) stock have tumbled.Source: Teerawit Chankowet / Shutterstock.com From its mid-February highs, V stock has shed over 20%.When it comes to this selloff of Visa stock, there are two important truths.InvestorPlace – Stock Market News, Stock Advice & Trading TipsFirst, as long as coronavirus hysteria dominates the minds of consumers and investors, Visa stock will keep dropping. Secondly, once coronavirus hysteria passes, Visa stock will rebound with significant velocity.So buying the dip of Visa stock is the smart move, but only once fears about the coronavirus pass. It remains unclear when those fears will pass, and as long as this lack of clarity persists, the stock won't bounce back. Coronavirus Hysteria Will Hurt VisaAt first, the coronavirus outbreak was largely contained to China. When the virus was only circulating there, Visa had to adjust its second-quarter revenue growth rate guidance lower by about three percentage points, citing a drop in cross-border business in Asia and lower travel spending.Now the virus is a global problem impacting not just China, but almost every country around the world. * 7 Stocks to Sell as We Enter a Bear Market Naturally, Visa's cross-border business will take a hit across the globe, as consumers around the world choose to stay at home more and reduce their spending. In that world, Visa's growth will drop. Its revenue and profits may even fall to 0% for a few weeks.Against that backdrop, Visa stock won't work. It is a growth stock (traditionally its revenue increases 10%-plus annually) with a growth valuation of 28 times its forward earnings. The company needs to sustain 10%-plus revenue growth in order for the stock to rise.As long as coronavirus hysteria forces consumers to curtail their spending, Visa won't generate 10%-plus revenue growth and Visa stock won't head higher. Visa Stock Will Bounce BackIn the long run, Visa stock will bounce back from the coronavirus selloff.That's because, as big and as scary as COVID-19 is, it's a temporary problem. Within a few months, strict quarantining slowed the virus' spread in South Korea and China. Warmer weather should also help stop the virus from spreading in April or May. Even further, multiple companies have developed potential vaccines, and it's likely that by 2021, a treatment for the virus will be widely available.All in all, then, I think it's quite likely that by summer, the coronavirus outbreak in the U.S. — and across the globe — will be largely under control.If so, consumer spending trends will rebound tremendously, supported by tons of fiscal and monetary stimulus. That rebound in consumer spending will cause Visa's revenue growth rates to jump back into double-digit-percentage territory. Rebounding growth will lead to a rebounding stock, and Visa stock could very easily march back towards the $200 level in a hurry. The Bottom Line on V StockAt some point, the decline of Visa stock will become a buying opportunity because COVID-19 is a temporary problem, and Visa is a long-term winner.But I don't think we are at that point yet. Instead, it feels like there will be more more negative news ahead on the coronavirus front. As long as the headlines remain negative — and the virus keeps spreading at an exponential rate globally — Visa stock will struggle to rebound.Luke Lango is a Markets Analyst for InvestorPlace. He has been professionally analyzing stocks for several years, previously working at various hedge funds and currently running his own investment fund in San Diego. A Caltech graduate, Luke has consistently been recognized as one of the world's top stock pickers by various other analysts and platforms, and has developed a reputation for leveraging his technology background to identify growth stocks that deliver outstanding returns. Luke is also the founder of Fantastic, a social discovery company backed by an LA-based internet venture firm. As of this writing, he did not own any positions in any of the aforementioned securities. More From InvestorPlace * America's Richest ZIP Code Holds Wealth Gap Secret * 7 Stocks to Sell as We Enter a Bear Market * 4 Energy Stocks Paying Jaw-Dropping Dividends * 3 Stocks to Buy That Will Dodge Any Volatile Market The post Wait for the Fears of Coronavirus to Clear Before Buying Visa Stock appeared first on InvestorPlace.
Visa Stock Will Bounce Back Fast From This Bear Market
Fri, 13 Mar 2020 13:48:43 +0000
There's no doubt that Visa (NYSE:V) stock is suffering along with the rest of Wall Street these days.Source: Tada Images / Shutterstock.com The famed credit card company's stock is down 15% so far in 2020, but even that poor performance is better than the broader market that's now in bear market territory.Sure, it's harder to be optimistic about stocks when the bears are running rampant for the first time in 11 years.InvestorPlace – Stock Market News, Stock Advice & Trading TipsBut I'm still a fan of Visa stock, which continues to earn a solid B in my Portfolio Grader. It also offers income-hungry investors a solid dividend. The Coronavirus Is Shaving ProfitsRemember where we were just a couple of weeks ago: Visa was soaring over $210 per share while being a consistent winner for investors. * 7 Stocks to Sell as We Enter a Bear Market From the time of its IPO until before the coronavirus from China-induced selloff, V stock was up 1,200% from its IPO. It was making money from the transactions of more than 3.3 billion credit cards around the world.But things change fast when something as horrid as a global pandemic comes in play. Visa announced this week that it will take a revenue hit of 2.5% to 3.5% in the second quarter. The virus is particularly impacting its cross-border business."Cross-border growth rates have deteriorated week by week since the coronavirus outbreak in China, and trends through Feb. 28, 2020 do not yet fully reflect the impact of the coronavirus spreading outside of Asia," Visa said. "As such, we anticipate that this deteriorating trend has not bottomed out yet."Visa had originally predicted net revenue growth in the second quarter to be in the low double digits, so it's possible that the company will see revenue fall below the 10% it recorded in the fiscal first quarter.That's not great news for Visa, but it's important to acknowledge. Visa is doing the responsible thing in managing Wall Street's expectations. This way there won't be a negative surprise when it reports earnings again in April. Visa's Business Will Bounce BackVisa and any other payment processor is going to fall on some hard times in a bear market. When the economy slows down, fewer people will be swiping their Visa cards while going out to eat or attending concerts.But it's also really important for investors to remember that this bear market is not a result of a bad market. Just a few weeks ago, we were all enjoying record high after record high.The market fundamentals haven't changed. This is a bear market that is based on fear and speculation. As the virus fades away — and it will fade away — Visa's business model and plan will remain untouched.The cashless economy — seen by the growing number of people who are conditioned to carry a credit or debit card instead of cash — will continue to benefit V stock for the long term.Visa has a history of being a solid, if unspectacular, growth stock. Its earnings rose from $2.49 per share to $5.32 per share in the last three years. And they will continue to rise in the future. When this global health crisis is over, you can expect V stock to return to its former solid self and bring stability to your portfolio.Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the "Master Key" to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters. More From InvestorPlace * America's Richest ZIP Code Holds Wealth Gap Secret * 7 Stocks to Sell as We Enter a Bear Market * 4 Energy Stocks Paying Jaw-Dropping Dividends * 3 Stocks to Buy That Will Dodge Any Volatile Market The post Visa Stock Will Bounce Back Fast From This Bear Market appeared first on InvestorPlace.
A 6.2% Yield Makes WFC Stock Attractive, but Its Culture Is Worrisome
Fri, 13 Mar 2020 10:19:26 +0000
Wells Fargo (NYSE:WFC) chair Elizabeth Duke and board member James Quigley resigned March 8 under pressure from both the House Financial Services Committee and within the bank itself. WFC stock fell more than 12% on the news. Source: Shutterstock The resignations came just hours before CEO Charlie Scharf appeared in front of Congress Tuesday to explain how he was working to regain the trust of customers across the country. He was the third Wells Fargo CEO to appear before Congress over the past four years. If this continues, the government's going to have to start charging the bank appearance fees for taking up so much of its time. Oh, wait, it just did that, agreeing to pay $3 billion to the Justice Department and the Securities and Exchange Commission for all the fake accounts it opened between 2002 and 2016. That was on top of $1.2 billion in previous fines. InvestorPlace – Stock Market News, Stock Advice & Trading TipsIn the case of Scharf, WFC shareholders can be happy he's an outsider, having served as CEO of Visa (NYSE:V) between November 2012 and December 2016, and Bank of New York Mellon (NYSE:BNY) from July 2017 to October 2019. * The 10 Best Stocks to Buy After The Market's Historic Sell-Off If anyone can change the corporate culture at Wells Fargo, it would be an outsider like Scharf. To Scharf's credit, he testified that he doesn't expect the changes to be completed until 2021. "I am confident we can move this company in a significantly improved direction," Scharf said.I guess we'll find out. There's No Denying 6.2% Yield Makes It AttractiveIn the meantime, Wells Fargo stock yields a juicy 6.2%, a dividend payout that's got InvestorPlace contributor Laura Hoy suggesting it's a stock that every 20-year-old should buy."Last week, the bank came one step closer to putting the ordeal firmly in the rear-view mirror after agreeing to pay $3 billion in damages. On top of that the firm has replaced its CEO and several board members and completely overhauled its employee compensation structure," Hoy wrote on March 2. "As the bank emerges from this scandal, it could become a great value play. Not only that, but Wells Fargo offers a dividend yield just shy of 5%."Of course, since Hoy's article, the coronavirus correction kicked in, sending WFC's share down and its yield up. I get where my colleague's coming from. At 20, even if an investment in Wells Fargo goes south, a young investor has plenty of time to recover those losses. And, yes, Scharf may be the person to right the ship, recouping a big chunk of Warren Buffett's recent paper losses. At the end of December, Berkshire Hathaway's (NYSE:BRK.A, NYSE:BRK.B) 345.7 million shares of the company were worth $18.6 billion, 2.7 times Berkshire's cost basis of $7.0 billion. However, as I write this, those holdings are worth only $11.4 billion, or just 1.6 times higher than what it paid for the bank's shares.Last May, I wrote an article about Buffett's ongoing support for Wells Fargo. "Buffett's support is excellent news if you own WFC stock, but terrible news if you own stock in Berkshire Hathaway, whose position in WFC stock is its third-largest equity holding," I wrote May 8. Wells Fargo has since fallen to Berkshire's fifth-largest position behind Apple (NASDAQ:AAPL), Bank of America (NYSE:BAC), Coca-Cola (NYSE:KO), and American Express (NYSE:AXP). Oh, how the mighty have fallen. The Bottom Line on WFC StockWhile Buffett's other top bank holdings all yield between 3-5%, Wells Fargo is currently yielding 6.2%, making it an income investor's dream stock. For this reason, it's easy to see how some people could be enticed to own it. If you're one of these people, down almost 34% year to date (including dividends) through March 10, I say buy it.However, if you're like me, and believe in investing in the best company possible, I'd look to JPMorgan (NYSE:JPM) or Bank of America (NYSE:BAC) for your bank investments.Will Ashworth has written about investments full-time since 2008. Publications where he's appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 10 Best Stocks to Buy After The Market's Historic Sell-Off * 9 Gold Stocks to Stave Off Coronavirus-Induced Volatility * 7 Stocks to Buy After International Women's Day The post A 6.2% Yield Makes WFC Stock Attractive, but Its Culture Is Worrisome appeared first on InvestorPlace.
Three Reasons Visa Could Hit New 52-Week Lows
Fri, 13 Mar 2020 10:05:18 +0000
The coronavirus is grinding businesses, schools and in some cases, entire countries to a complete halt. While life will eventually go on and people will begin shopping once again, Visa (NYSE:V) stock may still have downside ahead.Source: Teerawit Chankowet / Shutterstock.com Don't get me wrong, I love Visa from a company standpoint, and have owned Visa for a very long time. In fact, it's one of the longest-held stocks in my long-term portfolio. I was lucky enough to pare down that position at $200, and even though I felt silly as the stock continued even higher, that rally felt overdone.Given the latest pullback, I've had an opportunity to once more add to my stake. But I have reservations about building back a full position, even though V stock is 14.5% off its highs.InvestorPlace – Stock Market News, Stock Advice & Trading Tips Coronavirus and V StockThe coronavirus isn't the only reason I'm concerned about Visa, but it's the one I'll begin with. There seems to be two camps when it comes to the virus. One thinks the world is going to end and the other thinks it's nearly a hoax. * The 10 Best Stocks to Buy After The Market's Historic Sell-Off Those are extreme examples, but that's kind of the point. We have some people stocking up on supplies and others that still won't wash their hands. But one thing that's hard to deny is the economic impact. Apple (NASDAQ:AAPL) slashing guidance, Delta (NYSE:DAL) reducing capacity and all sorts of events being cancelled are just a few examples.People pay for these services with credit cards. They're not necessarily all Visa cards, but they are cards. As we shift to a cashless society, there's certainly a secular trend for companies like Visa to ride. However, when people stop spending — even temporarily — it's a dagger for credit card companies.Management is already acknowledging the impact. On March 2nd, company management said it expects a 2.5% to 3.5% impact to second-quarter revenue. They did not provide a full-year update though, and plan to do so when the company reports earnings.It's hard to be optimistic with so many economic pauses taking place around the world, that a company like Visa won't feel the impact. Oil Prices Are Getting CreamedI expect the economy to be okay, despite the headlines from the virus, stock market and oil prices. At least, that's my glass-half-full approach at this point in time. If plunging oil prices will eventually lead to falling gas prices, and the economy stays relatively healthy, it will be a huge win for U.S. consumers.Maybe that will offset the negative impact Visa feels at the pump. You see, when the price of gas falls, the sum at the gas pump is lower, which hurts the top line for credit card companies. Now maybe consumers make up for that elsewhere — like the mall — or maybe they don't.Either way, lower gas prices are surprisingly a risk for V stock and its peers, even as consumers benefit. Peer PanicVisa stock is still well above its 52-week low, which was set one year ago down at $148.02. Obviously that figure will change as we lap the annual range, but it goes to show how well V stock has been holding up.Down 14.5% after Monday's notable market-wide bounce, it's outperforming peers like MasterCard (NYSE:MA) and American Express (NYSE:AXP). MasterCard has fallen 19% from its highs, while Amex has dropped more than 25.5% and recently hit new 52-week lows.It's possible that V stock has bottomed, hitting $168.31 on March 9th. If that's the case, then great. Bulls need the stock to reclaim and maintain above its 200-day moving average, then work on getting back above the $190 to $192 area. If it hasn't bottomed, a decline similar to its peers could be in store. a 25% decline from the highs would put V stock down to $160, for reference. Click to Enlarge Source: Chart courtesy of StockCharts.comI could be totally wrong about Visa. With a small position in the name, I hope that I am. But I can't help but be cautious when I see companies cutting guidance, events being cancelled and oil prices falling. Visa will come out of this situation as strong as ever, but I believe the impact will be more than just the second quarter and that V stock could correct further as a result.Will it be enough to thrust it to 52-week lows? Maybe not, but I'm certainly cautious right now.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL and V. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 10 Best Stocks to Buy After The Market's Historic Sell-Off * 9 Gold Stocks to Stave Off Coronavirus-Induced Volatility * 7 Stocks to Buy After International Women's Day The post Three Reasons Visa Could Hit New 52-Week Lows appeared first on InvestorPlace.
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