Global Payments Scales Up Yet Again

The lucrative and growing payments market is one that increasingly rewards scale, and the leading players are acting accordingly. First Data (FDC) and Fiserv (FISV) are pairing up, as are Fidelity National (FIS) and Worldpay (WP). While not on the same scale, JPMorgan (JPM) is also scaling up, recently announcing the $500 million acquisition of InstaMed to target the fast-growing healthcare payments vertical. Not to be outdone (or left behind), Global Payments (GPN) has announced an acquisition of Total System Services (TSS) that should boost it to around 8% share of the U.S. acquiring market while filling in some gaps in its covered verticals.

Fintech is still hot, and although not every analyst or investor is sold on Global Payments’ strategy of using wholly-owned software offerings to drive customer acquisition and retention for its payments business, the shares seldom trade at much of a discount. Although I don’t think Global Payments is particularly cheap, I believe today’s share price is a relatively fair reflection of the value of the business at this point.

Read more here:
Global Payments Scales Up Yet Again

Global Payments Executing On Its Vision And Delivering Margin Leverage

It may sound uncomfortably similar to "it's different this time", but Global Payments (GPN) is a prime example of how good companies always seem to manage to find a way to do better than expected. In the case of Global Payments, it has taken the integrated payment and omni-channel concepts and run with them, combining/folding payment functionality into broader offerings of specialized software and services that not only make the customer relationships stickier but more profitable as well.

Global Payments sports high multiples and high expectations, and I wouldn't ignore the competitive threats posed by existing head-to-head rivals (not to mention potential future threats from companies like Amazon (AMZN), Square (SQ), and PayPal (PYPL)), but I believe Global Payments' integrated and omni-channel offerings, as well as its strong global position, make it a formidable player in the market. A high single-digit revenue growth rate from here can support a fair value in the $120s, but I would expect this stock to sell off pretty sharply if the earnings momentum were to falter.

Read more here:
Global Payments Executing On Its Vision And Delivering Margin Leverage

Fidelity National Information Services Looks Ready To Grow Again

I can't say that FIS (NYSE:FIS) (also known as Fidelity National Information Services) hasn't felt more love this year. While some growth concerns have stalled out the stock a few times in the last three years, the shares have risen more than 20% year to date, outperforming peers like Fiserv (NASDAQ:FISV) and Jack Henry (NASDAQ:JKHY) and more or less keeping pace with First Data (NYSE:FDC). 

While FIS certainly isn't as cheap as it was, the shares still hold some appeal as the company looks toward improving underlying conditions. Not only is management executing very well with its integration of Sungard, it's leveraged to expanding interest margins among its bank customers, aging IT infrastructure, and growth overseas. With the potential to drive FCF growth in the high single digits to low double-digits, FIS's share price could approach $100.

Click here to continue:
Fidelity National Information Services Looks Ready To Grow Again

Global Payments Has Swung Back To Its Normal (Aggressive) Valuation

Back in February, I thought investors had a rare opportunity to buy the high-quality, growing card acquirer and processor Global Payments (NYSE:GPN) at a discount to fair value. Since then, the shares have shot up about 40% - beating peers like Square (NYSE:SQ), PayPal (NASDAQ:PYPL), First Data (NYSE:FDC), and Vantiv (NYSE:VNTV) and more than doubling the return of the S&P 500.

I continue to believe that there are attractive synergy opportunities with the acquisition of Heartland, and I likewise believe that Global Payments has legitimate growth opportunities in the U.S. through integrated payments and overseas through underlying growth in card-based payments.

That said, valuation has returned to a more normal, aggressive, level and I struggle to see where the value lies here now. While I grant that the market loves to pay up for growth and Global Payments is likely to generate impressive growth for years to come, I just don't see the value given the growth expectations and the intensity of competition.

Read more here:
Global Payments Has Swung Back To Its Normal (Aggressive) Valuation

Seeking Alpha: VeriFone's New Management Says The Right Things, But Execution Is Key

Say what you like about sell-side research, it can at least tell you which way the wind is blowing about a particular stock. When it comes to VeriFone (PAY), analysts seem eager to forgive-and-forget and buy into the story of a strong turnaround in the making. Given how the stock has been performing, I'd say that investors are taking a similar viewpoint.

I still have my doubts. I like the hire the company made for the CEO position, and I've liked what I've heard from him so far in terms of strategy, but two troubling facts remain. First, mobile payment options are changing the electronic payments world. Second, Ingenico (OTCPK:INGIY) as capitalized on VeriFone's missteps to gain share, and has no plans to let up. I've substantially upgraded my growth expectations in light of the new CEO, but even with that I don't see these shares as a must-own on a GARP basis.

Please continue here:
VeriFone's New Management Says The Right Things, But Execution Is Key

Seeking Alpha: Gemalto Offers Growth With Security

When it comes to technology, France doesn't get much love. Apart from a handful of companies like Alcatel-Lucent (ALU), Dassault, and Bull SAS, it's pretty slim pickings for the most part. Gemalto (GTOMY.PK) is a notable exception, though, as this company is a world leader in smart cards and SIM cards and a leading player in the emerging near field communication (NFC)/mobile payment opportunity. Investors already prize Gemalto's growth potential, but these shares are worth a spot on investors' watchlists and may be more interesting to those who believe in a faster adoption curve for mobile payments and smart cards in the U.S. and China.

Please click below for more:
Gemalto Offers Growth With Security

Has Ingenico Done VeriFone A Favor?

VeriFone (NYSE:PAY) is a curious company. It is about to operate in a duopoly that arguably should not exist - who would have thought that there would be just two providers of electronic payment solutions for credit, debit and gift card transactions? It also happens to carry a rather rich multiple. 

What makes the situation even more interesting today is that its sole pure-play rival may have inadvertently done the company a major favor. If rumors and numerous press accounts are accurate, Ingenico (perhaps under some pressure from the French government) rejected a buyout bid from American conglomerate Danaher (NYSE:DHR).    

The Deal That Wasn't 

According to those same sources, Danaher offered $1.9 billion, or about 28 euros per share, for Ingenico. Although that deal would not have represented much of a premium to the stock's recent trading price, these shares were below 16 euros before the summer began. Then again, a $1.9 billion bid would not represent all that much of a premium in terms of multiples either. Based on analyst expectations, that deal would represent only 1.6 times sales and less than 10 times EBITDA - relatively meager given that VeriFone trades at approximately twice those multiples.

    
Not Just About the Money? 
If reports are to be believed, it was not just the valuation of the deal that was an issue. Apparently, the French government sees Ingenico as some sort of "essential" company to France's electronics industry and is not willing to see a foreign company acquire it.

Please click below for the full piece:
http://stocks.investopedia.com/stock-analysis/2010/Has-Ingenico-Done-VeriFone-A-Favor-PAY-DHR-NCR-NVS-SNY-GDF-KKR1223.aspx

Should Investors Pay Any Price For VeriFone?

There is no question that electronic payment specialist VeriFone (NYSE:PAY) was hit hard both by the recession and an accounting problem, but there is equally no question that the stock has rebounded sharply since its lows in early 2009. With electronic payments and credit card usage growing throughout the world, is there still enough runway for this company to validate what looks like a very high valuation? 

A Solid End To The Fiscal Year
VeriFone has done relatively well in terms of beating estimates over the past year or so, and the company ended this fiscal year on the same note. Revenue rose 27%, with 40% growth in the U.S. and 18% internationally.

Profitability also improved this quarter. Gross margin (on a non-GAAP basis) rose about two points to 40%, and earnings were better on an operating and net basis, whether investors chose to use GAAP or non-GAAP accounting.


Please follow the link for the full story:
http://stocks.investopedia.com/stock-analysis/2010/Should-Investors-Pay-Any-Price-For-VeriFone-PAY-HYC-EBAY-KKR1205.aspx