The current market environment is not rewarding risk. And thus is shying away from most growth stocks…but not PayPal (PYPL).
These shares have actually doubled the market return over the past week. That is because there is nothing wrong with the consumer. They are fat and happy with a 50 year low unemployment rate and virtually no inflation. So they are quite willing to spend regardless of inverse yield curves, Brexit or China trade.
Sure the same attractive qualities could be said for their direct competitors in the electronic payments industry including; American Express (AXP), Discover (DFS), Mastercard (MA) and Visa (V). And that explains why the Consumer Financial Services group has an Industry Rank of A (Strong Buy) at this time.
What makes PayPal stand apart from the pack is the above industry trend growth which is expected to be 19.3% per year over the next 5 years. A big reason for that stellar growth is the continued expansion of online transactions and especially mobile payments where they are seeing tremendous traction with Venmo.
On the value side of the equation we find that the average analyst target is still 20% above current levels at $130. Interestingly, just a few days back top rated analyst, Moshe Katri of Wedbush, reiterated his Buy position on the firm with street high $140 target. This increased target occurred after a meeting with PayPal’s CFO that led him to appreciate the expanding margins at play with Venmo.
I couldn’t resist adding PayPal Holdings, Inc. (PYPL - Get Rating) to the Reitmeister Total Return portfolio a week ago when it was pressing down ever closer to $100. Please remember that it was all the way up at $120 at the time of their last earnings announcement…which actually was another in a long string of beat and raise quarters.
This means that shares were punished severely during the recent market pullback stemming from the renewed US-China trade dispute. So as soon as the overall market forces took their foot of PayPal’s neck, shares were finally able to spring higher. Gladly with fair value targets still well above current levels, then there is still good reason to accumulate shares now.
Feel free to research PayPal further on StockNews.com where we show the 4 components that constitute the POWR Rating. Meaning beyond the singular POWR Rating Buy/Sell/Hold rating we dig in deeper to help you appreciate the full attractiveness of shares. That includes individual ratings on the following criteria:
- Buy and Hold Grade to understand its long term trajectory.
- Trade Grade to appreciate current momentum.
- Industry Rank because stocks are judged by the company they keep. The better the industry, the better the prospects for the individual stocks within the industry.
- Peer Grade shows how PayPal Holdings, Inc. (PYPL - Get Rating) stacks up versus its closest competitors.
To dig in deeper on each of these POWR Ratings elements for PayPal then click here: https://stocknews.com/stock/PYPL/
And to see the other 8 stocks I have selected along with PayPal, then check out the Reitmeister Total Return portfolio.
PayPal Holdings, Inc. (PYPL - Get Rating) shares were trading at $108.24 per share on Tuesday morning, up $0.57 (+0.53%). Year-to-date, PayPal Holdings, Inc. (PYPL - Get Rating) has gained 28.72%, versus a 17.90% rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...
More Resources for the Stocks in this Article
|Ticker||POWR Rating||Industry Rank||Rank in Industry|
|PYPL||Get Rating||Get Rating||Get Rating|
|AXP||Get Rating||Get Rating||Get Rating|
|DFS||Get Rating||Get Rating||Get Rating|
|MA||Get Rating||Get Rating||Get Rating|
|V||Get Rating||Get Rating||Get Rating|