Global Payments Should Beat Earning Again

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Jan 03 2007
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Global Payments Inc. (NYSE : GPN, quote), a leader in payment processing services will release its’ earning this Friday, 5-Jan-2007 BMO (before market open). Global Payments has beaten Wall Street earning estimate for the last 17 quarters continuously. Financially, Global Payments recorded $944 millions in annual sales with $136 million in profit.

Fundamentally, Global Payments does not have debts, gross margin of 61.5 percent and net profit margin of 14.4 percent. The earnings per-share is about 1.66 with current P/E of 27.90 with analysts’ consensus of “Moderate Buy”.

Global Payments has a rating of 5 out of 10:
  • Wall Street consensus: 0.42
  • Whisper Number: NA
  • Smart-Estimate: 0.45
  • Schaeffer Rating: 6
  • Power Ratings: 6
  • Insider Trading (last 52 weeks): $0
  • Option: May 2007 45.0 Call
  • Implied Volatility for Feb 2007 $45 Strike: 32.37 %

I’m optimistic Global Payments will beat the coming estimate earning again tomorrow and I think another gap-up might occurs thereafter. In early Dec-2006, Citigroup reiterated a “Buy” rating on Global Payments, Efunds Corp., Checkfree Corp. and Heartland Payment Systems Inc. Citigroup estimate electronic purchasing volume will probably grow 12.8 percent in 2006 and expect the growth to slow a little to 11.9 percent in 2007.

# TIP: How to make money on this company? Consider option as alternative to stock due to the leverage power. Since I’m bullish on this stock, I’ll consider option trading on GPN with 45.0 Strike Call – with sufficient time-value.

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