Visa - good entry point or time to trim?

Nobody can deny that V has a great business - through it's VisaNet electronic payments network, it processes over 65,000 transactions per second across 200+ countries, but it has zero credit default risk because it gets paid for each transaction but does not manage the debt. I've held positions in V for many years, and it's been a great long-term play. My question is, what should someone do with V right now? It's up around 4.25% the past month and sits at an all-time high. It's earnings call is scheduled for Tuesday, October 27. Fundamentalists might say it's too richly valued with a P/E ratio of 32.80, and that investors should trim now and wait for a pullback before buying additional shares. Chartists might say it's a great entry point because it's just breaking out from a 2-year cup-and-handle pattern. I tend to side with the chartists on this one, but I'd use a tight stop-loss in case I was wrong. What say you?

11 comments held Reddit says 11 on reddit ↗

u/kinetic_honda 3 1 day ago

I trimmed Visa and Master card a long time ago and then eventually completely divested out of them. This still haunts me today. Shouldn't have done that.
u/PMmeuroneweirdtrick 3 1 day ago

They're 2 great companies. For me they're an easy buy and hold.
u/Much_Mountain_6975 1 1 day ago

ouch, the ones that get away always sting the most i'm with you on the chart setup, that cup and handle looks clean and the volume's been building nicely behind it. 32 p/e isn't exactly cheap but for a business that literally skims a fee off every swipe without touching the debt side, it's earned that premium tight stop makes sense though, earnings can always blow up a pretty chart
u/flyingdutchmnn 3 1 day ago

A multi trillion dollar market is slowly getting lost as Trump scares Europe and others in to sovereign payment methods
u/blueskies8484 1 1 day ago

I think the time to get in was when crypto was scaring people that it would do away with credit cards. Now I’d just hold unless it dips for some reason.
u/moatandmargin 1 1 day ago

I wouldn't make a buy or sell call on Visa off a chart pattern. It's one of those businesses where trimming has rarely looked smart in hindsight. The risk I'd actually watch is Europe and others pushing their own payment systems, but that plays out over years, not quarters. Personally I'd only trim if it's grown into too big a chunk of the portfolio, not just because it hit a high.
u/Everyday-Joe-Invests OP 1 1 day ago

I totally agree with you if you're looking at V as a long-term core position. If the goal is to start building a position in V to be held for years, I'd start scaling in here and buy more if it dipped around earnings or other points in the future. Things are a bit more challenging for swing/momentum traders.
u/albertsportsnet1 2 1 day ago

The volume was light most of last week, RSI \~68, not overbought. When it went into earnings already near highs like now, the 20-day drift was roughly flat. Business is solid (revenue \~11–14%/yr, EPS \~13%/yr, \~26x forward), so long-term it's fine. I'd either start small and add after Oct 27, wait for the earnings reaction. The bigger post-earnings pops came when it was well off its highs going in.
u/TheWatchman1991 3 1 day ago

IPO holder. I would never sell or try and time a dip in Visa.
u/Everyday-Joe-Invests OP 1 1 day ago

Congrats, you must be ecstatic about your returns!
u/TheWatchman1991 2 1 day ago

My top holding (Voo is right behind it) its been a great buy and hold