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Western Union (WU -25.5%) plunges after a miss on earnings and a cut in guidance that has...

Western Union (WU -25.5%) plunges after a miss on earnings and a cut in guidance that has brought in a rash of analyst downgrades. Notable Calls warns investors to stay clear of a value play with word out the company's business model is "broken."
Comments (11)
  • Kansiov
    , contributor
    Comments (6) | Send Message
     
    Does anyone have any details about the "word out" about the company's business model being broken? The reduction of future margins doesn't warrant a 25% drop... then again, the markets have been pretty stupid lately.
    31 Oct 2012, 03:01 PM Reply Like
  • ponderingahead
    , contributor
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    It seems pretty overdone to me... Morningstar lowered their value to $25 and Credit Suisse to $19 but nothing like the beating the stock is taking today.
    31 Oct 2012, 05:20 PM Reply Like
  • ponderingahead
    , contributor
    Comments (10) | Send Message
     
    I don't know either... This seems a pretty overdone reaction. Morningstar lowered their value estimate to 25 and Credit Suisee to 19, but nothing like the beating it is taking today.
    31 Oct 2012, 05:20 PM Reply Like
  • firebird09
    , contributor
    Comments (2) | Send Message
     
    its just a market selloff. People panic and money on the line plays with their heads. The price will rebound so hold your stock or BUY BUY BUY if your not in. Companies lower guidance all the time, then crush them next quarter.
    31 Oct 2012, 10:59 PM Reply Like
  • firebird09
    , contributor
    Comments (2) | Send Message
     
    Its just a market selloff or over reaction! Hold your stock or BUY BUY BUY if your not in already. When money is on the line it plays tricks with peoples heads. The next few days you will see a rebound !!! I AM GOING LONG!!!
    31 Oct 2012, 11:00 PM Reply Like
  • highperformance
    , contributor
    Comments (2) | Send Message
     
    Watch the stock tomorrow and for the next few days possibly. It will correct the selloff. If your worried, don't be. The company intrinsically is worth more today than it was 2 days ago. We are looking at peoples tendencies at this point not company worth. peace
    1 Nov 2012, 02:32 AM Reply Like
  • highperformance
    , contributor
    Comments (2) | Send Message
     
    Bottom line: To value WU correctly, we have to factor in not only growth and EPS, but also the stability of its business, its great potential for new markets, the possibility of a dividend raise, and the $2 cash surplus that could be used for massive stock buybacks.

     

    All these factors considered, I believe a multiple somewhere between 12 and 14 would be appropriate, giving a fair value range of $23 to $27. This is what a conservative 27% to 50% investment opportunity looks like.
    1 Nov 2012, 02:33 AM Reply Like
  • jimidean
    , contributor
    Comments (128) | Send Message
     
    "We ended relationships with over 7,000 Vigo agent locations that could not meet our new compliance requirements."

     

    Are these 7,000 agent locations still able to conduct transactions into/out of the USA? If so, why did they end the relationship?
    1 Nov 2012, 09:04 AM Reply Like
  • Kansiov
    , contributor
    Comments (6) | Send Message
     
    They ended them due to compliance issues.
    1 Nov 2012, 09:36 AM Reply Like
  • jimidean
    , contributor
    Comments (128) | Send Message
     
    exactly, but how then are these 7,000 agents still able to conduct business in the USA, those issues haven't gone away.
    1 Nov 2012, 12:56 PM Reply Like
  • Eternal
    , contributor
    Comments (47) | Send Message
     
    the stock yields 3.9% at a tad under $13, with ~1.60 FY12 earnings and guiding 15% decline in 2013 to 1.40 or so due to implementing a price investment plan to capture/retain market share. they've indicated based on experience they expect price investments to payoff after year 1. on top of this their implementation of new compliance requirements is denting their Mexico business in the short term but expect to grow it again in 2H2013. all these things mean 1H2013 is likely their trough, and their business model is still intact. just going to go finish reading the call transcript now but i'm really thinking of buying some now.
    1 Nov 2012, 10:25 AM Reply Like
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