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Visa Inc. (V) – Analysts May be Wary but Their Price Targets Just Keep Rising

When a company is working on all cylinders, there is little that can be done to slow it down. The company’s bread and butter sales may be having a difficult time, but there’s cash to muddle through. The company’s working partners are happy, the board is happy, and, most of all, shareholders are happy.

Visa Inc., a retail electronic payments network, works to process the world’s retail financial transactions for credit cards, ATM’s and debt payments. As a newly traded company, the financial markets are still working to determine some sort of “standard” by which to judge the company’s performance. By all accounts, however, they feel the company remains in a solid position after a remarkable and profitable initial offering which rose some 70% from its initial offering of $44 per share.

Some may suggest that the company might be compared to its major competitor, MasterCard. There is a similarity in what the companies do, but it is there that the similarities end. Each is structured quite a bit differently, and has distinctly different financial organizations. At present, Visa has $40 billion in cash on its books and only $40 million in long term debt. In today’s market, or any day’s market for that matter, it would be difficult to find a company in a better position.

If there were one area where the company might see a bit of concern, it would be in consumer spending. Poorer consumer confidence is likely to drive velocity of purchases down. The company just sees this as a cyclical sort of occurrence, but is nonetheless finding ways to trim costs to keep pace with it.

Where the company is making headway is with its social responsibility efforts. Partnering with Bill Clintons’ world initiatives and Oxfam, the company’s stewardship and goodwill payments are working to avoid what can happen to a company’s reputation such as ExxonMobile if they make excessive profits without letting the public know that they are the good guys. Looking behind the program, there does seem to be a little self-serving backslapping going on. However, this looks to be good-neighbor policy combined with a good business policy, which is always good for stockholders.

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