Insights

This Cash Cow Stock Is Underappreciated by the Market

In this clip from “Ask Us Anything” on Motley Fool Live, recorded on June 3, Fool.com contributor Matt Frankel discusses a few payment stocks that he owns, including one that should be getting more attention from investors. 

Matt Frankel: I’ve owned Square since two days after its IPO or Block (NYSE: SQ) or whatever. I call it Square until it changes its ticker, then I’ll actually start calling it Block. I recently added to PayPal (NASDAQ: PYPL) in the market downturn. I owned PayPal as part of the eBay (NASDAQ: EBAY) spinoff originally then sold it but I recently bought back in. I love PayPal. I think it’s a cash-cow business that is just making so much money that the market doesn’t really appreciate it.

There’s a few that are on my radar. Shift4 (NYSE: FOUR) is the big one that’s on the top of my radar. I describe them as the Square for hotels and restaurants. They really specialize in an all-in-one solution for hospitality businesses. They are building out other forms of payment processing. They’ve signed some big clients. SpaceX is the big one they just signed and they are just rolling out.

They’re the payment provider for Starling the internet service that SpaceX is doing. Really great customer relationships and it’s really impressive traction so the ticker symbol for that one is FOUR, F-O-U-R and that’s high on my radar right now. But the only two other payment stocks I own are Square and PayPal.

Matthew Frankel, CFP® has positions in Block, Inc. and PayPal Holdings and has the following options: short January 2024 $200 calls on Block, Inc. The Motley Fool has positions in and recommends Block, Inc. and PayPal Holdings. The Motley Fool recommends Shift4 Payments, Inc. and eBay and recommends the following options: short July 2022 $57.50 calls on eBay. The Motley Fool has a disclosure policy.

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