Why Vantiv Inc. Shares Could Vault 20%

Does this analyst make a good case? Or is it just more noise from Wall Street?

May 29, 2014 at 10:27AM

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Vantiv (NYSE:VNTV) gained slightly today after Wells Fargo upgraded the electronic payment processor from market perform to outperform.

So what: Along with the upgrade, analyst Timothy Willi raised his price target to $36-$38 (from $30-$32), representing as much as 22% worth of upside to yesterday's close. So while momentum traders might be turned off by Vantiv's year-to-date price sluggishness, Willi's call could reflect a sense on Wall Street that the company's growth prospects are becoming too cheap to pass up.

Now what: Wells boosted its 2014 earnings-per-share estimate for Vantiv from $1.82-$1.90 and its 2015 view from $2.02-$2.21. "On the heels of the announcement to acquire Mercury, we look for the shares to move higher as investors respond to: (1) the core franchise stabilizes and should see some acceleration in H2 2014; and (2) the Mercury transaction is accretive to EPS on a nominal basis and to long-term growth rates," said Willi. "The end result is that we believe sentiment on VNTV will shift as investors no longer focus on the deceleration of the last several quarters and begin to view VNTV as a company in which they have more confidence in above-average long-term growth rates." Given Vantiv's hefty debt load and steep-ish P/E of 35, however, I'd hold out for a wider margin of safety before betting on it. 

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Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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