Payments Industry Stock Price Tracker

By: Kenneth Coe

Figure 1 is the August Payments Industry Stock Price Tracker. The chart measures current stock prices and market caps (as of August 27th, 2012) as well as movement over the last 30 days, and year-to-date. Companies in the payments value chain experienced mixed results in August after volatile trading in July and have maintained an average YTD increase of nearly 20% relative to the broader market’s 10% gain thus far in 2012.

In summary:

The issuing sector saw significant gains in August, edging up 4% on average this month with positive results among a majority of players tracked. Though negative publicity like the Barclays LIBOR scandal and the JPMorgan Chase trading losses weighed down the financial sector in the last few months, issuers have displayed relative strength throughout August as investors speculate on an economic back-stop by the ECB in Europe and the potential for another round of intervention in the United States. Discover is now up 61% on the year and continues to touch all-time highs as many analysts maintain ‘buy’ ratings, citing attractive valuations. FleetCor, the largest mover in the group posting a 16% increase in the month, saw upward pressure as the company raised Fiscal Year 2012 guidance above analyst estimates, citing recent acquisitions of fuel card companies in Brazil and Russia that are expected to be accretive to both revenue and profit in 2012.

Mixed performance in the processor / acquirer sector resulted in a slight retracement of ~-2% in August. Global Payments continues its decline under heavy selling pressure following a data breach in March that resulted in the compromise of nearly 1.5 million card accounts. Heartland Payment Systems, the only player to increase in market value this month, leads gains among processors / acquirers as reported Q2 earnings beat analyst EPS estimates and the company guided revenues for Fiscal Year 2012 above consensus estimates. TSYS announced the formation of a joint venture with Central Payment Co. on August 9th. They now own 60% of the joint venture, which will operate as a TSYS affiliate.

The network sector saw a modest decrease, losing 2%, lagging positive movement by the broader capital markets. Some analysts are predicting uncertainty surrounding spend volume and revenue growth due to currency headwinds and a slowing global economy.

Figure 1: Monthly Average Stock Price Tracker

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

For more information, please contact Kenneth Coe, Analyst specializing in Credit Card Issuing,

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