Chris Smith
Thursday, February 04, 2010
Western Union Shares Can Deliver
WHILE A DOWNBEAT FORECAST has Wall Street troubled about the prospects for Western Union (ticker: WU), the world's largest money-transfer business can still deliver attractive returns, if investors are patient.
The company, spun off from First Data in 2006, does a brisk business
handling money transfers for foreign workers here and abroad who are
sending money home to friends and family.
But with demand for money transfers still pressured by a sluggish
economy and high unemployment in the U.S. and elsewhere, Western Union
sounded a cautious note during a conference call today that sent
investors running.
At one point, the share price fell as much as 11%, the most in almost 12 months.
Nevertheless, Western Union remains a strong global franchise, not to
mention an enormously profitable business capable of generating piles
of cash. So with the global recession near an end, future prospects
look good.
