MoneyGram (MGI) $7.27
In February 2021, MoneyGram dropped from above $11.50 to nearly $6 on news that Ripple Labs (XRP) was being sued by the SEC. MGI had been using Ripple Labs (XRP) crypto currency exchange to transfer money overseas. MoneyGram announced they would not use Ripple to facilitate the transfer of funds globally. This was due to the SEC lawsuit. Ripple has now settled with the SEC. We don’t know if MoneyGram will re-engage with Ripple, now that Ripple Labs has settled with the SEC. MoneyGram is growing very rapidly working with its Visa Direct partnership and transfers using Visa debit cards for real time global transfers. A return to a partnership with Ripple is possible. MGI seems to be doing very well without the Ripple partnership.
Friday April 30, LOTM will add MoneyGram to its LOTM: Ten Under $10 for the Double list. We do not see MGI as a rapid mover to a double, but rather a long-term position trending higher, Fintech stock, benefiting from crypto/blockchain digital transformation of the payment industry. We suggest holding a core position and adding to the position on weakness and sell some on strong moves higher. Use your TA skills! This is a good one for that.
- Fundamentally, Revenue as well as new business is growing very rapidly. For a deeper dive, the Q4 conference call is linked here.
March business (note PR below) is booming with cross boarder digital transaction business growing 131% year-over-year for March. 28% of MGI business is now digital with 15 months of triple digital growth. It appears that digital transactions are heading towards 100% of MGI business.
MGI has opportunity through refinancing to lower it expense structure as well as a reduced headcount due to its shift towards digital transfers from physical storefront presence.
- Technically, the price is above the major moving averages of 50-day & 150-day M.A. – a positive.
Now that the price is above its related moving averages, we would not be surprised to see the share price pop towards the $8.00 level.
MGI has an Ascending Triangle pattern. Ascending Triangles are bullish patterns – a positive.
If we drop down on the chart, to look at the MACD, it is on a buy signal – a positive.
The Chaikin Money Flow is trending above its moving averages – a positive.
PR Headline:
MoneyGram Delivers All-Time Record High for Transactions in its Direct-to-Consumer Digital Business in March
April 15, 2021
MoneyGram Online (MGO) achieved its 15th consecutive month of triple-digit transaction growth with 131% year-over-year cross-border transaction growth for March.
Growth has been driven by consumer demand for the Company’s leading app as it sustains strong app download growth rates and continues to experience strong customer retention rates. Full story is linked in the title.
MoneyGram does not get the headlines PayPal, Square, Visa and Master Card get in the payment industry, but it is carving out a rapid growth rate with an old but well-known global brand.
TipRanks.com
Analyst Price Target on MGI
$7.75▲ (6.90% Upside)
Based on 2 analysts offering 12-month price targets for MoneyGram International in the last 3 months. The average price target is $7.75 with a high forecast of $9.50 and a low forecast of $6.00. The average price target represents a 6.90% increase from the last price of $7.25.
Q1 results are out May 7th. Ripple Labs has settled with the SEC. Possibility of a re-newed deal with Ripple. A past deal that was very lucrative for MoneyGram, interrupted by the SEC suit against Ripple. Re-financing of debt – reduced headcount. Triple digit growth in digital transactions, 15 year-over-year months in a row… We are guessing, MoneyGram could get an upgrade from analysts in the coming quarters. We like this as a core holding until something changes our mind.
At this time, we are assuming that should a market sell off of size happen, a Black Swan event, one can dollar-cost-average through the decline in this holding and be in good shape on the other side.
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* An account related to LOTM holds a position in this security.
Neither LOTM nor Tom Linzmeier is a Registered Investment Advisor.
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