DCF Conclusion Study on Visa (V)

A Name that benefits from Inflation in the Dow

Hi Everyone, quick market update before we discuss Visa (V)’s DCF Conclusion Study.

The market continues to rip higher as Canada begins the global central banking rate cutting process with its first 25BP interest rate reduction in 4 years.

I sent out this week’s forecast on Monday regarding tech (NQ) and kept a cautiously optimistic positioning view.

Most of my DCF Conclusion Studies on QQQ’s Top 10 stocks indicated to me that they trade at the “Base Case”, meaning that there is still more upside potential before we reach the Bull Cases.

Without the DCF Conclusion Studies on QQQ’s top names, it would have been much more difficult for me to share a bullish view on this week’s NQ/QQQ setup to Members as macroeconomic data continues to come in soft and the consumer environment continues to be deteriorate.

I think the economy is increasingly at risk, but the stock market is not focused on that at the moment.

In my view, the best way to understand where the index is going is to do analysis on the top 10 components of the index with the DCF Model and use Bear/Base/Bull cases to establish potential downside/upside ranges. This analysis, added with index technical structure, provides a practical edge to traders and investors.

Recent Example

Doing so allowed me to identify a potential sector rotation opportunity in the Dow (ticker: YM) last Friday where the Dow rebounded by almost 600-800 points from last Fri. leading up to today.

This was discussed in my United Health DCF Conclusion Study, where I said the Dow had some serious bounce potential at 37850 when it still traded 38925. Its recent local low was around 38000 and has bounced back to 38800.

I study the Dow because of its diversification benefits.

We’re going to keep building our edge with another DCF Conclusion today, this time in Visa.

Visa has benefitted due to inflation ballooning the size of transaction volume.

Can the stock continue to benefit at the expense of consumers? Let’s examine their risk/reward!