Business Performance Analysis of the Leading Payment Card Networks

In an earlier paper entitled “Financial Statement Analysis: Imlek Inc., Mlekara Subotica Inc. and Somboled Ltd” we introduced a financial statement analysis approach whose conclusions were presented in the context of the interests of all the relevant stakeholders in society. In the first part of this paper, we reiterate the same approach by observing the leading payment card networks; Visa Inc. (V), Mastercard Inc. (MA), and American Express Company (AXP). Our results confirm current claims about the crisis that AXP is facing nowadays, since it is the least profitable and liquid company within our sample; moreover, it is the most leveraged company. The second part is related to the corporate valuation analyses, based on our sample companies. Our estimated prices of Visa Inc., MasterCard Inc., and the American Express Company are $88.6, $115, and $75.89 per share, respectively. Finally, the third part of this paper is related to the technical analysis. In order to find the most suitable and still useful tools, we provide a back-test analysis for the various technical analysis indicators for each and every sample company for the period between January and July 2016. We found that most of the technical analysis indicators have both advantages and disadvantages; they work properly only under specific circumstances and indeed indicate a buy or a sell signal.