Figuring out the right price for growth is equal parts art, science,
and voodoo and as close to a sure way to stir up comments as anything.
If you're a momentum investor that doesn't care about the price you're
paying for growth, WEX (NYSE:WEX)
could have a lot to offer, as I do believe this payment process company
still has a meaningful opportunity to gain share in its core U.S. fleet
operations, to say nothing of the substantial opportunities in Europe,
Asia, and Latin America and in other verticals like travel and
healthcare.
For my part, though, I can't just buy a stock and
trust that the growth will be there. Even with what I think are pretty
bullish assumptions about future revenues and FCF generation (as well as
ROE and EBITDA), about the best I can do is say that the growth
opportunity here is reasonably priced. "Reasonably priced" with ample
upside isn't a bad setup for a growth story, but I do expect these
shares to be more volatile than normal.
Read more here:
WEX Offers A Long Runway Of Growth ... And Is Priced Accordingly
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