Payments Industry Stock Price Tracker

Navigator Edition: October 2012
By: Collin Bauer

Figure 1 is the October Payments Industry Stock Price Tracker.  The chart measures current stock prices and market caps (as of October 31, 2012) as well as movement over the last month, and year-to-date.  The companies tracked across the payments value chain experienced mixed results in October after a strong September but have maintained an average YTD increase just shy of 30% relative to the broader market’s 11% gain thus far in 2012.

In summary:

The issuing sector continued to see gains in October, edging up 4% on average this month with positive results for nearly every issuer tracked on the heels of third quarter earnings reports. Upon news of the resignation of Citi CEO Vikram Pandit, and appointment of Michael Corbat, the bank’s stock price jumped and finished the month up 14%. Discover excited investors last month with its announcement of a new partnership with PayPal; the stock increased by a modest 3% in October, and is up 69% since January. American Express and U.S. Bank were the only two issuers with declines this month as third quarter earnings were positive for most issuers tracked.

The processor / acquirer sector shared mixed results in October and in aggregate performed worse than the overall market.  FIS, Fiserv, and Global Payments were the only tracked stocks in this sector that posted October gains. Despite ‘buy’ ratings from many analysts and the recent acquisition of an ecommerce payment processor, Vantiv’s stock fell 8% this month after the expiration of its IPO lockup and after Fifth-Third Bank (who previously owned Vantiv before it went public) reported a negative adjustment to the value of a warrant it holds in Vantiv.  Heartland’s stock also fell 19% this month after significantly lowering its earnings guidance upon realizing increased operating costs.

The two networks tracked posted similar, positive, gains in October; in aggregate, the sector was up 1% from 30 days ago. Over the last two months, Visa and MasterCard stock prices have fluctuated on news surrounding a $7.25 billion settlement reached between the two networks and lawyers representing over 7 million retailers. The first hearing is set to land in court November 9th as many retailers have filed formal complaints.  Network revenue growth as a whole is expected to slow through the end of the year due to continued uncertainty in global consumer spending.

Figure 1: Monthly Average Stock Price Tracker

Source: Yahoo Finance, First Annapolis Consulting research and analysis.

For more information, please contact Collin Bauer, Analyst specializing in Credit Card Issuing,

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