Thank you for all that replied to my previous post I was wondering if anyone can comment on if they think that western union can cont to grow and produce margins in the 30% range. I know that they already have 277,000 locations. Can they cont to grow are or is the company saturated with growth.

Thanks

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what the Feds do on our southern border.

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LOL

I guess investors are the demographic they're going after.

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Don't forget, WU is not just a US stock. People don't only immigrate to the US, they might also immigrate to Europe from, say, North Africa or the Middle East, and they'll still need to send money back.

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the biggest chunk of their international business is US to Mexico.

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How many economies in this world are cash economies? A majority, really. And those economies are fast becoming "cash rich".

Look at Africa and China and India.

Thanks for the investment idea. I am buying in on Monday.

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They need to find growth other than the Mexico-US corridor.

Also from personal experience, people do not like the high transaction fees as well.

RML

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an addendum to my earlier post. M*'s stockpicker newsletter runs two portfolios, tortoise and hare. tortiose is mainly mature blue-chips, and hare is smaller, faster-growing, and higher-risk companies. WU is in the tortoise. that means that M* thinks it will grow steadily, and is pretty safe from competition, but it's not the next Microsoft.

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Western Union is in the Hare, not the Tortoise. That means that M* expects pretty high future growth. They do, however, rate WU as below average risk.

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I am not confident about the growth prospects of western union. My reluctance is based on the following

1. Western Union business is largely concentrated on money transfers between US and latin america. Primarily the customer base is a low wage worker
a. who doesnt own a bank account or
b. lacks the know how to use other modes or
c. the recepient party doesnt own an account.

Their business i completely limited to this area. Any change in immigration policies or regulation will be a major risk factor

Africa may be a possibility. But exactly how many low end workers from africa cross the border to come here and work on low end jobs?

You can forget India and China. The immigrants from these countries are primarily higher skilled workers who know how to use internet transfers and the banking systems in these countries are very mature. They already have the ability to provide money to the recepients in mutliple modes.

Latin America:
If the banking environment improves in this area and becomes pervasive, I am not sure why anyone would pay the commisions being charged by WU currently.

Overall, I think internet banking will make this company outdated or atleast put a big crimp in the margin.

Just my thoughts.
Onemore!

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Warren Buffett thinks WU is a very good investment. I would respect his judgement better than most others...

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Just curious.

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Not impressed. Microlending and cell phones?

Sounds far fetched to me. OTOH, if they keep using their free cash to repurchase shares, there stock could do okay.

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don't laugh. Grameen Bank in Bangladesh has a cellphone program, Grameen Phone, in a joint venture with some Norweigan bank, Telenor. Grameen Phone earned about $96.3m last year. Grameen Bank contends the venture was set up with the last Telenor CEO, who had intended to give Grameen majority ownership within six years. They also contend that the current CEO has reneged because the venture is so profitable. I don't know how good a case Grameen has (personally, I'd rather they get the full share of Grameen Phone), but such ventures can be profitable.

of course, Grameen Bank is a nonprofit. Western Union would be doing this for profit.

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read this link:

This year a smaller percentage of Mexican immigrants in the United States sent money back to their homeland than in 2006, according to a report released Wednesday by the Inter-American Development Bank. The bank said the reduction had left at least two million people in Mexico without the same financial help they had once received.

ITH.com

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Looks like Buffet is paring back his stake in WU.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aK3sQL6dRQ0E&refer=home

Other financial stocks were reduced. Berkshire pared its stake in Englewood, Colorado-based Western Union Co., the biggest U.S. money-transfer business, 68 percent to 3.2 million shares; Minneapolis-based Ameriprise Financial Inc., the investment adviser spun off from American Express Co. in 2005, dropped 41 percent to 2.52 million shares.

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According to Morningstar's front page today, Buffett has sold all of his WU holdings.

I watched WU when they spun off until I realized Wal-Mart will wire transfer money both in US and International for a flat fee.

Gene