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'No-Hair' Visa

On Thursday, Cramer talked about “no hair” companies. These are optimistic businesses that have beat the consensus forecast and raised guidance. Also, they are not crimped by Washington budget deficits or the slowdown in China.

The first “no-hair” company is Visa, who announced on Feb 3 a knockout quarter. V is the go-between among consumers, banks and merchants, Cramer said, and does not lend people money.

“Visa’s the kind of name,” Cramer said, investors “need to think about during these tough times.”

The company makes money from dollar volume activity on its branded cards, processing payment card transactions and international transaction fees. And V dominates the credit and debit card business with 54 percent of the global market share versus just 25 percent for Mastercard.

Plus, V benefits from two trends: one is cyclical, people spending more money as the economy recovers and the second trend is secular, meaning long-term and not dependent on economies around the world. Now, Cramer said, given that more than half the transactions in the U.S. are still completed using cash (even higher percentage internationally) Visa has room to grow.

And Visa’s “hairless” quarter beat Wall Street’s consensus earnings estimate by 8 cents off a 91 cent base and up 12.7 percent year-on-year on better than expected revenues. The company updated its outlook, calling for 20 percent earnings growth in 2010.



Cramer’s charitable trust owns Visa.

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