This Payment Giant Has Already Seen Huge Upside... Who's Next?

Editor's note: In today's Weekend Edition of Empire Financial Daily, we're sharing an essay from our friends at our sister company Altimetry... As regular Empire Financial Daily readers know, Altimetry founder Joel Litman is a forensic accountant and CPA who specializes in "Uniform Accounting" – it's a methodology that he and his team use to […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily Weekend] Editor's note: In today's Weekend Edition of Empire Financial Daily, we're sharing an essay from our friends at our sister company Altimetry... As regular Empire Financial Daily readers know, Altimetry founder Joel Litman is a forensic accountant and CPA who specializes in "Uniform Accounting" – it's a methodology that he and his team use to determine a company's real financial health and earnings. By making more than 130 adjustments to the as-reported financial statements, Joel and his team can see past the accounting "noise" and gain a clearer picture of how a company is actually performing. Today, Altimetry Director of Research Rob Spivey explains how Uniform Accounting shows the true strength of one payment giant's returns... and how the Altimetry team looks for the next big winner like it in a specific corner of the markets. Here's Rob... --------------------------------------------------------------- This Payment Giant Has Already Seen Huge Upside... Who's Next? By Rob Spivey Americans are breaking out their credit cards for the holiday shopping season... It's no shocker that around 70% of the U.S. economy's output is powered by consumer spending every year. Americans simply love to shop. During the holidays, consumer spending reaches its peak when gift givers splurge on fancy gadgets and trendy apparel. This year, the National Retail Federation forecasts that the average U.S. consumer will spend nearly $1,000 on holiday shopping. Some consumers wary about debt and interest charges might look to avoid putting these purchases on their credit cards. These days, credit-skeptical consumers are becoming fewer and fewer. The reality is that a greater share of spending will end up on credit cards in the future as the digital-payments revolution gathers momentum. This is especially true as the pandemic pushes more retail purchases online and companies like Walmart (WMT) and Target (TGT) increase their e-commerce presence. Going forward, expect more Americans to have physical and digital wallets... One household name is a major winner of the digital-payments revolution... A major beneficiary of the surging growth in digital credit card payments is Visa (V). The payment processer is among the largest of its peers by market capitalization and is one of the companies that arguably created the industry. With its dominant position alongside Mastercard (MA) in a duopolistic market, one would expect Visa to generate outstanding profitability. But it looks like the company is a run-of-the-mill U.S. corporate giant based on an as-reported basis. Over the past five years, its as-reported return on assets ("ROA") has been trundling along between 12% and 14%. For context, the average corporate ROA in the U.S. is 12%. This means as-reported metrics tell us Visa is an average company. In reality, investors understand that Visa is no average company. The reason why is clear once you account for the distortions that are inherent to as-reported metrics. Using Uniform Accounting, we can see that growth in credit card usage has massively bolstered Visa's profitability. Putting aside the pandemic year in 2020, the company's Uniform ROA over the past half-decade has consistently been above 50%. With returns almost 5 times greater than corporate averages, Visa has seen tremendous success as more and more Americans turned to credit cards for e-payments in the past decade. The digital transformation and further adoption of digital payments will only accelerate this trend in the future. --------------------------------------------------------------- Recommended Links: [Make 2022 your most profitable year yet]( Joel Litman recently went live in a special event: The 2022 Altimetry Investment Summit. During the event, folks discovered why 2022 could be the best year for the stock market ever... why nearly 23 stocks he's found could be the biggest winners in 2022... and why you can score big on these stocks but major investors like Warren Buffett can't. To ensure you get to see the replay, [click here now](. --------------------------------------------------------------- [Tilson: Will This New Technology Put Trains & Airlines Out Of Business?]( An incredible new technology could soon get me from my home in Manhattan to Washington D.C. for as little as $25! This is likely to make a lot of people rich. [Click here for my analysis, where I include the stock and ticker symbol of my No. 1 way to play it](. --------------------------------------------------------------- Finding the next Visa before it's a megacap... Visa's success has led to massive wealth creation for the company's investors. Since its initial public offering ("IPO") in 2008, early public investors have seen 12 times returns as the stock price has soared. While still impressive, the reality is that public investors have missed most of the biggest move higher for Visa. The reason is that the company's IPO was 50 years after it was originally created. Visa started inside Bank of America (BAC) and a broader consortium of other banks several decades ago. By the time it reached the New York Stock Exchange as the largest IPO of its time, it was already valued at $18 billion. Visa's timing for going public was great for the company but ill-timed for public investors. They have had to settle with 12 times returns. Sometimes, promising tiny companies that go public with less than $1 billion in value can yield higher returns. At Altimetry, when we are stock-picking, we're searching for that undiscovered diamond in the rough... We are looking for the kind of return public investors got from companies like Equinix (EQIX), which went from a $10 million company in 2003 to being worth more than $70 billion today. That's roughly a 5,300 times return. Every $1,000 invested in EQIX in 2003 is worth more than $5 million today. So, let's put that into perspective. Visa would need to be worth $100 trillion today to have produced a similar level of return... The unfeasibility of massive returns from these large-cap names is why we spend so much time hunting in the world of microcaps... We want to help investors find potential opportunities for transformative wealth creation... finding tiny names like Equinix that can turn $1,000 into millions. That's why we just put together a brand-new presentation to highlight our favorite microcap stocks. In it, we explain why we are so bullish for 2022 and name a few stocks that are poised for a banner year. We also reveal all of the existing portfolio for our service targeting the microcap sector – ticker symbol and all – which you don't need an e-mail, credit card, or phone number to access. And that's not all. We explain how to get access to our top five favorite microcaps to buy today, each with 500%-plus upside... for a tiny fraction of what others have paid. Get all the details [right here](... before this offer goes away for good. Regards, Rob Spivey December 18, 2021 If someone forwarded you this e-mail and you would like to be added to my e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2021 Empire Financial Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Empire Financial Research, 601 Lexington Ave., 20th Floor, New York, NY 10022 [www.empirefinancialresearch.com.]( You received this e-mail because you are subscribed to Empire Financial Daily. [Unsubscribe from all future e-mails](