I’ve been digging around trying to find some solid value picks to complement my portfolio. And I’ve been keeping an eye on PayPal for quite sometime. I used to have a decent position in it before but decided to cut ties. This has been a couple years now.
But now I’m checking it out again and it seems pretty damn solid for where it’s currently at. Am I missing something? Nearly all metrics seem very strong fundamentally. But I’m curious as to what the bear case is? What’s hindering the company so much?
Because as I look at the company, it’s roughly 70B in overall valuation. Revenue continues to keep going up each year. (About 12% average over the last 3 years. Which is respectable.) They’re planning to buy an awful lot of shares back. (Based on what I’ve read $15-$20B worth over the coming years.) about $5B (give or take 1B or so.) back last year alone. The company is generating good cash flows of about $4-6B a year. If you throw the buy backs on top that’s some serious value back.
To me, looking at the cash flow and revenue trend, the balance sheet, cash on hand, the massive buybacks, and everything else in between else just seems like a screaming buy. I don’t see many companies out there with this kind of presumptive value discrepancy. What are your thoughts? I’m personally seriously considering opening a position again for the long term.