PayPal : A value buy and the reward is worth the risk
Diupdate
Technicals :
From a pattern perspective, from April 2022 onwards, each time a major low was created, there was some sort of descending channel formation. Now it is a case of pattern inside a pattern and we can see the same formation even inside the internal pattern.
I did take two entries at two major inflection points and the market rallied after both of them. But I didn't book any profits since I'm in it for the long game. Now the price is coming back to create a third inflection point.
So I'll be taking a third and final entry in this levels expecting a high probability for a rally to at least the start of the larger descending channel, which is a move of about 60% from the current levels. The total allocation after this entry will sum up to 2.5% of my portfolio.
But I also do consider the possibility for the price to not hold on to this level and crash further along with the broader market. If that happens 45 to 47 USD will be a level, which I'll consider adding on, depending upon the fundamentals and technicals at that time. There is a gap to be filled at those levels.
Fundamentals :
Pros :
- Revenue and profitability is increasing.
- There is good enough cash flow.
- A large user base who trust the company with their services.
- PayPal owns Venmo which is very popular among youngsters and the brand has become a verb.
- Elon Musk has this idea to make x.com an all in one app and integrate payment services in it. So there is a possibility that in future Elon might even considering taking over PayPal since he also has a history with the company.
Cons :
- Highly competitive sector since major giants also offer payment services like Apple Pay, G Pay, Amazon Pay, Shopify Pay etc.
- Effective September 27, 2023, senior Intuit executive Alex Chriss will become PayPal’s president and CEO, replacing current CEO Dan Schulman. Need to see how the new management is going to run the company and what major changes will be implemented from here on.
Closing Statement :
I believe that all the cons mentioned herewith are already factored in to the current valuation and hence at current levels PayPal is a value buy. I will update when I make any changes in my positions, underneath this post.
From a pattern perspective, from April 2022 onwards, each time a major low was created, there was some sort of descending channel formation. Now it is a case of pattern inside a pattern and we can see the same formation even inside the internal pattern.
I did take two entries at two major inflection points and the market rallied after both of them. But I didn't book any profits since I'm in it for the long game. Now the price is coming back to create a third inflection point.
So I'll be taking a third and final entry in this levels expecting a high probability for a rally to at least the start of the larger descending channel, which is a move of about 60% from the current levels. The total allocation after this entry will sum up to 2.5% of my portfolio.
But I also do consider the possibility for the price to not hold on to this level and crash further along with the broader market. If that happens 45 to 47 USD will be a level, which I'll consider adding on, depending upon the fundamentals and technicals at that time. There is a gap to be filled at those levels.
Fundamentals :
Pros :
- Revenue and profitability is increasing.
- There is good enough cash flow.
- A large user base who trust the company with their services.
- PayPal owns Venmo which is very popular among youngsters and the brand has become a verb.
- Elon Musk has this idea to make x.com an all in one app and integrate payment services in it. So there is a possibility that in future Elon might even considering taking over PayPal since he also has a history with the company.
Cons :
- Highly competitive sector since major giants also offer payment services like Apple Pay, G Pay, Amazon Pay, Shopify Pay etc.
- Effective September 27, 2023, senior Intuit executive Alex Chriss will become PayPal’s president and CEO, replacing current CEO Dan Schulman. Need to see how the new management is going to run the company and what major changes will be implemented from here on.
Closing Statement :
I believe that all the cons mentioned herewith are already factored in to the current valuation and hence at current levels PayPal is a value buy. I will update when I make any changes in my positions, underneath this post.
Trade aktif
Added onto the position @ 58.4 USD. Summed up the total holding to 2.5% of the portfolio.
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