WU

The Western Union Company

Finance/Real Estate, Consumer


Presented:03/02/2017
Price:$19.93
Cap:$9.64B
Current Price:$11.75
Cap:$3.97B

Presented

Date03/02/2017
Price$19.93
Market Cap$9.64B
Ent Value$12.41B
P/E Ratio39.86x
Book Value$1.87
Div Yield0.03%
Shares O/S483.60M
Ave Daily Vol5,848,661
Short IntN/A

Current

Price$11.75
Market Cap$3.97B
The Western Union Co. provides global money movement and payment services, providing people and businesses with fast, reliable and convenient ways to send money and make payments around the world. The company operates through three segments: Consumer-to-Consumer, Consumer-to-Business and Business Solutions. The Consumer-to-Consumer segment provides money transfer services between consumers, primarily through a global network of third-party agents using it multi-currency, real-time money transfer processing systems. This service is available for international cross-border transfers that is, the transfer of funds from one country to another and, in certain countries; intra-country transfers that is, money transfers from one location to another in the same country. The Consumer-to- Business segment provides consumers with flexible and convenient options for making one-time or recurring payments. It consists of U.S. bill payments, Pago Fácil, and international bill payments. The Business Solutions segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals. The Western Union was founded in 1851 and is headquartered in Englewood, CO.

Publicly traded companies mentioned herein: Alibaba Group Holding Ltd (BABA), Moneygram International Inc (MGI), Wal-Mart Stores Inc (WMT), Western Union Co/The (WU)

Highlights

The presenter is short shares of Western Union (WU), seeing a favorable risk/reward set-up for a short position. He identifies headwinds in key international markets for WU and some underappreciated cost and expense issues. He expects WU shares to decline 15% over the next 12 months as a “base case,” with further optionality on top of fundamental challenges, such as invigorated competition from Ant Financial or unwanted attention on WU’s tax situation, as well as more qualitative headwinds. He believes WU shares could trade down to $17 from $20 today, with optionality for additional downside if more headwinds come into play.

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Idea Discussion

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