Play These ETFs On Visa-Plaid Deal
Zacks Investment Research | Jan 14, 2020 02:30AM ET
Visa Inc. (NYSE:V) is set to take over U.S.-based fintech company Plaid in a deal worth $5.3 billion — lets start-ups connect to users’ bank accounts .” Plaid has been working with Venmo, a mobile payment service owned by PayPal (NASDAQ:PYPL) , mobile investing app Robinhood and cryptocurrency exchanges Coinbase and Gemini, per CNBC.
Plaid’s customer base doubled from 2017 to 2018 and has expanded to the U.K. and Canada, per CNBC. As of December 2019, Plaid said 25% people in the United States with bank accounts have connected to the fintech company through an app.
The start-up acquired Quovo two years ago to expand its presence beyond banking, and step into broader financial services and investments. The line of business makes it clear why Visa, which operates retail electronic payments networkglobally,chose Plaid as a compelling acquisition candidate.
Visa CEO said Plaid has been seeing a CAGR of about 100% since 2015. The deal would prepare Visa for the technological disruption in the next decade. Visa also expects the deal to inject as much as 100 basis points to net revenues by 2021.
Visa’s shares 0.81% on Jan 13 and also added gains after hours. However, Visa has a Zacks Rank #3 (Hold) and an ESP of -1.08%. The negative ESP lowers chances of a beat in the to-be-reported earnings, slated to be released on Jan 29.
Investors, who want to bet on the Visa-Plaid deal but are having second thoughts due to negative ESP, may play the below-mentioned Visa-heavy ETFs. A basket approach always minimizes stock-specific risks.
iShares U.S. Financial Services ETF (IYG )
Visa takes the second spot in the fund with about 9.79%. The fund has a Zacks Rank #3 (read: Should You Bet on Bank ETFs Before Earnings Release? ).
ETFMG Prime Mobile Payments ETF (IPAY )
Visa takes the fourth position in the fund with about 6.05% exposure (read: ETFs to Invest in Mobile Payments and Drone Economy ).
iShares U.S. Financials ETF (IYF )
The Zacks Rank #3 fund invests about 5.64% in the stock, taking the third position.
SPDR SSGA Gender Diversity Index ETF ( (ASX:SHE) )
Visa takes the top spot in the fund with about 5.28% focus.
Technology Select Sector SPDR Fund (XLK )
The Zacks Rank #1 (Strong Buy) fund puts 5.19% in Visa (read: Apple (NASDAQ:AAPL) at All-Time High, Poised for an Upbeat Q1: ETFs to Benefit ).
Invesco S&P 500 Quality ETF (SPHQ )
The fund invests about 5.14% in the stock (read: Should You Invest in Factor & Smart Beta ETFs? ).
Get The News You Want
iShares Edge MSCI USA Momentum Factor ETF (MTUM )
Visa takes the second spot in the fund, with about 5.14% exposure (read: Bet on These Momentum ETFs to Gain From Wall Street's Rally ).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.