Payments Industry Stock Price Tracker
Figure 1 is the July Payments Industry Stock Price Tracker. The chart measures current stock prices and market caps (as of July 30, 2012) as well as movement over the last 30 days and year-to-date. Companies in the payments value chain experienced a volatile July, similar to the month of June, yet maintained an average YTD increase of nearly 20% relative to the broader market’s 8% gain thus far in 2012.
- The issuing sector saw modest gains in July, adding 2%, with fairly positive results across the board. Despite the gains, the sector has seen its fair share of negative publicity, including the growing loses at JPMorgan Chase from a trading debacle, Barclays’ admission of involvement in the manipulation of LIBOR (and the investigations being launched into the involvement of other banks), and Capital One’s fine of $210 million by the Consumer Financial Protection Bureau in a settlement related to charges of deceptive marketing practices of credit card “add-on” products. Bank of America recorded the largest movement, a decline of 11%, due in part to further mortgage-related issues.
- The processor / acquirer sector posted a decline of 2% during the month of July. It was announced on July 19 that TSYS signed a long-term agreement with Bank of America to provide credit card processing services for Bank of America’s domestic credit card portfolios. Fidelity (FIS) lost 7% during the month; it was recently announced that one of their biggest clients, Bank of Montreal, will be moving processing functions in-house. The change will reduce Fidelity’s earnings, on an EBIDTA basis, by a total of $60 million as of 2014.
- The network sector saw a modest increase, adding 3%, during a month in which it was announced they had entered into a settlement agreement to resolve class action claims, which assuaged investors eager for a resolution. Separately, Visa added 6% during the month and expressed confidence surrounding the debit market, which is seeing signs of improvement going into the next quarter. MasterCard was flat for the month.
Figure 1: Monthly Average Stock Price Tracker
Source: Google Finance, First Annapolis Consulting research and analysis.
For more information, please contact Michael Hutton, Analyst specializing in Credit Card Issuing & M&A Advisory, firstname.lastname@example.org
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