Thread/ the Israeli micro-cap version of $V & $MA
$SHVA operates payments systems for debit cards and mobile payments (Apple & Google pay) in Israel. If it traded on any major exchange would likely be >2x the current price.
$SHVA operates payments systems for debit cards and mobile payments (Apple & Google pay) in Israel. If it traded on any major exchange would likely be >2x the current price.
1/ first note is that $V & $MA are not competition. They don’t compete in the market and actually own ~10% of $SHVA shares each. The company was founded by Israeli banks.
2/ Shares are very illiquid. Large share holders such as the banks, Visa & MasterCard own ~60% of the company. The illiquidity is the main reason the company trades and such low multiples. Trading on Tel Aviv stock exchange doesn’t help either.
3/ $SHVA currently trades at ~15x EBIT. In comparison, MasterCard & Visa trade at 38x and 33x EBIT respectively. Other smaller comps such as Worldline or Global Payments sell between 25-30x EBIT.
4/ Israeli consumers still transact with a lot more cash than developed markets. $SHVA will grow as consumers begin using card payments more frequently. Transaction fees are also >50% lower, which leaves room for growth also.
5/ at half the price of competitors and a reasonable runway for growth, it’s hard to argue this won’t do well. I’ll be digging a lot more into this one.
Big thanks to @puppyeh & @pbcinc for bringing this to my attention.
Big thanks to @puppyeh & @pbcinc for bringing this to my attention.
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