Marsico Capital Management was among the biggest sellers in the second quarter of Visa Inc., the world’s largest payments network, and Vanguard Group Inc. added to its holdings, as the stock posted its steepest decline in almost two years.
Marsico liquidated its remaining 10.4 million shares and also closed out its investment in No. 2 network MasterCard Inc., selling 5.21 million shares. Vanguard increased its stake to 17 million shares from 16.3 million shares, the company confirmed.
Visa and MasterCard both fell more than 20 percent in the three months ended June 30 as Congress approved limits on debit- card interchange, or “swipe” fees, charged to merchants. The companies and their investors are waiting for the Federal Reserve to determine fees that are “reasonable and proportional” to the cost of processing debit transactions.
MasterCard and Visa continue to grow profit amid a worldwide consumer shift from cash and checks to plastic. Morgan Stanley’s Frisch is among 33 analysts surveyed by Bloomberg who recommend investors buy the companies’ shares.
Fundamentals ‘Solid’
The stocks are “relatively cheap,” Frisch said in his research note. “Fundamentals remain solid.”
Maybe investors were panicking when seeing the mutual fund selling shares, but we do not know the reason for it. Visa may no longer fit into the fund’s investing strategy and there fore unloading the position. If it was due to uncertain future, it may not show up as terrible as expected and the fund may potentially start buying back the same way as Buffet did with Johnson & Johnson (JNJ) recently and that may push the stock back higher. From the long term I think this stock has a great potential for its growth towards its $100 fair value.
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