Introduction
Western Union Co. (WU) and Fiserv (FISV) Inc. are two information technology stocks/companies that have both recently experienced falling stock prices. Interestingly, both companies currently offer investors similar total return potential. However, Western Union Co. offers both high current income and capital appreciation, whereas Fiserv Inc. is a growth stock offering only capital appreciation. Consequently, these examples provide an excellent opportunity to highlight the principles of investing based on the individual investor’s unique needs, goals, and objectives. Investing is not a one size fits all process. Furthermore, risk should also be a major investor consideration. Importantly, risk is a multifaceted concept which I will attempt to convey throughout this video.
In case you missed it, here is a link to my previous video where I go over five technology stocks:
Technology Stocks Are Expensive – Here Is One That Is Not
An additional benefit of covering these two technology stock opportunities are the lessons in measuring performance that they offer. I often point out that measuring performance without simultaneously measuring valuation is a job half done. The point is that I do not believe it is just enough to know what the numbers are, it is also critically important to know how and where the numbers came from. Stock prices are often pathological liars. Valuation is a measurement of the value of the business which is always a function of the amount of cash flow the entity generates on behalf of its stakeholders.
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Disclosure: No positions.
Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.