samedi 13 février 2021

Paypal (PYPL)

On january 30th 2020,  I bought my first Paypal (PYPL) shares. I paid about 115 US$ each share. At the time, Paypal was expensive. The current PE was about 50, but the growth was great and the prospects looked great too. 

We laughed at COVID in january 2020. Everybody thought that it was a fucking scam. I thought that too. 


So, the pandemic was never a criteria for me in buying Paypal.  

Sometimes, you pick a good or great company and great circumstances happen, thus magnifying your returns. That's what happened with Paypal, thanks to the great and wonderful pandemic. 

Very quickly, people started to make more and more transactions online. And Paypal benefitted a lot from that trend. The trend was still there, but online transactions got crazy. 

To understand better, let's take a look at the EPS since 2016: 

2016:   1,16$
2017:   1,49$
2018:   1,74$
2019:   2,09$
2020:   3,58$

Compound annual growth from 2016 to 2020: About 32%

Last friday, my PYPL shares hit 300$ each. They almost tripled on a single year. Now, the current PE is 66 and the forward PE is 52. That's still pretty expensive, but it was expensive one year ago, when the stock was selling between 100 and 115$. So, I'd dare to say that somebody who bought the stock one year ago could be still be interested in buying it today. Because it's not much more expensive now and prospects look even better than last year.  

Paypal, while being very expensive, isn't that much a trendy company. It's not like Bitcoin or Tesla. There's no hype around it. So, the rich valuation doesn't seem to be pumped by a gigantic boner. It's always strange to pay 50 times the earnings, but some stocks have always been expensive and seem at the right place to continue to perform. 

Anyway, I like Paypal and it's now one of my biggest stakes. 

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