Visa Inc.

HOME CAPITAL GROUP INC. $50 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.7 million; Market cap; $2.0 billion; Price-to-sales ratio: 3.8; Dividend yield: 1.2%; TSINetwork Rating: Average; www.homecapital.com) offers mortgages to borrowers who don’t meet the stricter criteria of larger, traditional lenders. Even though Home Capital caters to riskier borrowers, it has avoided the huge credit losses that have crippled many U.S. banks. That’s because it continues to do a good job of identifying problem loans early. It then uses this information to restructure a borrower’s repayment terms and adjust its lending policies. Home mortgages account for 90% of the company’s loan portfolio. The remaining 10% consists of other loans, such as non-residential mortgages and credit cards. Home Capital offers its loans through five retail branches in Toronto, Vancouver, Calgary, Montreal and Halifax....

PLEASE NOTE: Our next Hotline will go out on Friday, July 8, 2011. STANLEY BLACK & DECKER INC., $72.05, New York symbol SWK, has agreed to buy Sweden’s Niscayah Group AB. Niscayah designs and installs security systems, including surveillance cameras and fire alarms, for a wide variety of businesses. This is a big purchase for Stanley, which will pay $1.2 billion for Niscayah, including assumed debt. That’s 94% more than the $619.3 million, or $4.12 a share, that Stanley earned in 2010. The company holds cash of $1.9 billion, so it can easily pay for this purchase without having to sell shares, which would dilute the ownership of existing shareholders....

SYMANTEC CORP., $18.50, Nasdaq symbol SYMC, sells Internet security technology, including anti-virus email filtering software. The company plans to spend between $750 million and $1.25 billion on acquisitions in its current fiscal year, which ends March 31, 2012. That’s equal to roughly 9% of its $14.3-billion market cap. Symantec is particularly interested in companies that expand its expertise in “cloud computing.” That’s where data and software are kept on remote servers. Users access these servers over the Internet....

The improving U.S. economy is helping more consumers repay their loans on time. That’s pushing down loan losses at a number of U.S. banks, and improving their profits. However, the outlook for the U.S. banking industry remains uncertain. High unemployment continues to hurt demand for new loans, and the industry faces greater regulations in the wake of the financial crisis.

Stock advice: Diversification is the key to lowering your risk in the U.S. finance sector

...

VISA INC. $78 (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 830.1 million; Market cap: $64.7 billion; Price-to-sales ratio: 7.5; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.visa.com) operates the world’s largest retail electronic-payments network. The company processes credit, debit, prepaid and commercial payments under the Visa, Visa Electron, Interlink and PLUS brands. The stock fell to $67 in December 2010 after the U.S. Federal Reserve proposed new limits on fees banks can charge for debit-card transactions. Visa gets about 20% of its revenue from debit-card transactions in the U.S. Regulators now aim to make a final ruling on these fees by July 21, 2011. However, a new bill in the U.S. Senate would delay any changes to the current system for two years....

Bank stocks tend to account for the bulk of most investors’ Finance-sector holdings. Banks are writing down fewer loans as the economy recovers and borrowers pay back their loans, but demand for new mortgages and other loans remains weak. To diversify your Finance holdings, we recommend investing in non-bank financial-services companies, such as these six. We have a high opinion of all of them, but not all are buys right now. VISA INC. $78 (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 830.1 million; Market cap: $64.7 billion; Price-to-sales ratio: 7.5; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.visa.com) operates the world’s largest retail electronic-payments network. The company processes credit, debit, prepaid and commercial payments under the Visa, Visa Electron, Interlink and PLUS brands....

PLEASE NOTE: Our next Hotline will go out on Thursday, April 21, 2011. AMAZON.COM INC., $180.01, symbol AMZN on Nasdaq, plans to sell the latest version of its Kindle portable e-book reader for just $114, which is $25 less than the previous version. To make up for the price cut, the company will display ads as screen savers and in a banner at the bottom of the home screen. It will also offer special deals to users, such as those at Groupon or other daily “best deal” web sites. Amazon introduced its Kindle portable e-book reader for $399 in 2007. Later models have become slimmer and cheaper, with better displays and more memory. The new model is expected to go on sale in U.S. at Target and Best Buy stores, as well as on Amazon’s web site, on May 3, 2011....

PLEASE NOTE: Our next Hotline will go out on Thursday, April 7, 2011. EBAY INC., $31.36, Nasdaq symbol EBAY, is buying GSI Commerce Inc. (Nasdaq symbol GSIC) which sells e-commerce services to over 500 businesses. GSI’s customers include major retailers, such as Toys R Us and Aeropostale, consumer-electronics makers, including Hewlett-Packard, and professional-sports leagues, such as the National Football League. GSI helps these clients process and fulfill online orders, and increase their online sales....

Visa Inc., symbol V on New York, operates the world’s largest retail electronic payments network. The company processes credit, debit, prepaid and commercial payments under the Visa, Visa Electron, Interlink and PLUS brands. The company generates revenue from fees it charges card issuers and merchants for using its network. These fees are based on payment volume, transactions processed and other factors. Visa continues to benefit from the global trend toward greater use of credit and debit cards. In its 2011 first quarter, which ended December 31, the company’s revenue rose 14.2%, to $2.24 billion from $1.96 billion a year earlier. Earnings rose 15.9%, to $884.0 million from $763.0 million....

BECKMAN COULTER INC., $82.78, New York symbol BEC, has accepted a friendly, $83.50-a-share takeover offer from Danaher Corp. (New York symbol DHR). Beckman shareholders and regulators must still approve the deal, but it should close by June 30, 2011. The stock is trading below Danaher’s offer, which indicates that investors do not expect a higher offer. Beckman Coulter is still a hold....