Fiserv has solid fundamentals and long-term appeal but faces short-term headwinds that constrain its valuation at the current price.

Let's continue. Fiserv. This is one of the three largest payment and financial technology platforms in the United States, and it acquired First Data in 2019. Its most important product is the Clover point-of-sale system.

I know my favorite restaurant in Scottsdale, and it's a kebab restaurant. They use the " Clover" system, which is that annoying thing that asks for tips on everything in the world, but it's great for small and medium-sized businesses because it integrates everything.

There are all these software add-ons related to it. I mean, the ease of selling is much better than trying to swipe the card over and over again. It's much easier . So, they are also present in Australia.

I saw Vicerve in They're huge, man. In Australia. They are global. They're global, Toby. They are a huge global organization.

This was a very attractive stock at one time. It reached a 52- week high of $192. It was one of those stocks that you might remember, Toby. It was known as an accumulator stock .

The idea of cumulative corporate growth is reminiscent of how companies buy at any price and continue to achieve cumulative growth. This is what Fiserv was like until things suddenly changed.

This happened late last year, when it announced disappointing profits, but future prospects were even worse. They simply realized that what they were offering was not the right service experience for some of their customers.

There was some dissatisfaction, and they realized that they had to reinvest in their operations, products, and services to improve them. So, it is a solvable problem , but the company's stock has taken a very heavy hit .

So that's the crux of the matter , is n't it? It's still a good company, but it's constrained at this price.

All these companies we're talking about, Toby, are profitable companies. It has good cash flows, strong free cash flows, and solid balance sheets. We are not talking about companies that are breathing their last.

You know, those investments in failing companies ( cigar butts). We are not talking about those companies.

You can see the metrics, 9.7 times delayed earnings, and they feel they can increase earnings per share by more than 10% in the long run. Growth will be slower this year. You see things like this quite often .

Short-term headwinds are the reason for cheap stocks and large fluctuations, but the long-term outlook is very attractive.

What we did was, the "Value Options Bulletin " sold a put option on Viserve stock at $50, okay? We received a premium of $4.50 per share. You can consider this type of contract to be a long-term (LEAP) contract, as it expires on January 15.

That is, 254 days . Typically, my definition of a "LEAP" contract is for more than a year, but that suits most people. So, 254 days.

What are the dynamics of return? If the stock is above the $50 level at expiry. Keep in mind that the stock's 52- week low is approximately $53 , and its high is $191. If it stays above $50, you have earned 9.9% of your maximum risk , which equates to 14.2% annually.

The worst-case scenario is that you own this stock with a single-digit price-to-earnings ratio at a breakeven point of $45.50. From there, you get all the associated ups and downs.

Therefore, we really like the risk-to-reward ratio of this strategy with a company of this size.