Hi trading geniuses out there! My goal for this IPO series is to not just show you trade set ups, but to also expand your mind and introduce you to new companies, processes, and ideas that you may not have otherwise been acquainted with. Remember the human race as a whole does not progress if we stick to old ways. We have to continue thinking outside of the box and get better as individuals to make the world a better place! The more we know, the better we become! It's that simple.
Let's talk EVOP, or Evo Payments! Evo Payments has been around for a minute. They are approaching 30 years actually. EVOP was founded in 1989 and is headquartered in Atlanta, Georgia, the mecca of all things corporate.This company specializes in exactly what it's name would imply: payments. Haha. EVOP is one the leading payment solution companies in the world and 50 countries and transacts in 130 currencies all over the world. They provide all of the following: domestic and international processing of debit and credit cards, processing of Gift cards, ACH checks, e-commerce solutions, Point of Sale and Mobile Solutions, marketing, analytics, and merchant funding.
It blows my mind that some companies out there STILL don't process debit and/or credit cards at their business. I mean, I honestly don't know how they function in an almost virtually cashless world. Many of you may already know, but my job right before joining the EPIC Real Life Trading team was as a Financial Service Representative at a large regional bank here in Tennessee. Part of my job entailed setting up small and large businesses with payment solutions just like EVOP. While we didn't use this actual company, my point is, there are tons of companies who have either no, or sub-par payment processing systems in place!
Let's move on to how EVOP makes money. Just like most payment processors, EVOP generates cash a few pretty standard ways. First and most obviously, once you have decided to set up your services with them, you are paying them (normally monthly) for services rendered, and for any equipment that you use. Beyond that EVOP will also take a percentage of all purchases. Oftentimes, this percentage is determined by the types of cards used (which is why a lot of companies used to not take American Express) and also based on transaction volume (how much money you are generating in a given amount of time). Lo and behold, EVOP actually just had earnings August 8, 2018 (perfect timing)! For second quarter they reported a 14% growth year over year from $123.9 million in 2017 to $140.9 million. "Adjusted EBITDA .... increased 12% to $37.0 million for the quarter, compared to $33.0 million in the prior year." CEO James Kelly hopes says the company is committed to growing through organic growth and acquisitions.
Where do I even begin with Competitors! I surely won't be able to go over all of them as there are hundreds out there, but I will gloss over some well known names and talk about a few in particular! Okay, close your eyes and think of payment processors. Paypal, Venmo, or Square ring a bell? That's because they are all behemoths in the payment processing world. As a business, your needs really determine what processors will be best for your company. Are you a small business that just sells crafts at the local farmers market? Well, you may just need a simple Square tile and the app. Or do you have a multi million dollar company? It all depends.
EVOP generates much of it's business by partnering with banks around the world. So let's flashback to my banking days. When I worked at the bank, the payment processor we partnered with was First Data. They provided a system almost identical to EVOP called Clover. Is there anything massively different about them? Not really, they do similar things. First Data's (FDC) chart looks like this at the moment and has finally broken from it's sideways momentum to climb higher in this unrelenting bullish market. I see EVOP moving higher from here, closer to First Data's price so there are some short term set ups we could play. I don't plan on holding it long term, just because I don't see it as impressive as Musk's Paypal (Jerremy's chart) or one of my other all time favorite payment processing systems, Stripe. Let's just say I am waiting for Stripe to IPO so I can shove cash into it. As far as setups on EVOP, here is the channel that it appears to be in. Which means, do your best to buy as low as you can and sell as high as you can. Other than that, hop in and snag an aggressive hourly play like this. Sweet and to the point.
Ta ta for now folks! That's all I have for today :) Let me know what IPO's you want to talk about and I will crank it out.
Be kind to one another!
"My mission in life is not merely to survive, but to thrive; and to do so with some passion, some compassion, some humor, and some style." - Maya Angelou