FIS - Fidelity National Information Services: Why I See An Upside After A Negative Return

2024-01-25 15:34:55 ET

Summary

• Fidelity National Information Services has seen a decline in valuation, underperforming the market.
• The company is undergoing a balance sheet transformation and operational improvements.
• FIS is expected to have a triple-digit potential return and is currently undervalued. I expect the company, at 15-20x P/E, to be able to beat the market and maintain a "BUY" rating.

Dear readers/followers,

Since initially writing on Fidelity National Information Services ( FIS ), we've seen the company significantly decline in valuation - it's underperformed with a 1-3% decline since my last piece, while the market has gone up 22%. So any investment made since my last bullish article, is not an especially good one in terms of RoR. Inclusive of FX and dividends, my small position is in the green, but it's clear to me in retrospect that I went in too early and missed out on most of the drop which I should have waited for - the payment space was, and still is, in upheaval.

The company troughed around the $51 mark, we're now at around $60/share. The yield is also up to almost 3.5%, it's still a fundamentally sound business, and I believe the time is ripe for actually investing here, provided you're willing to bear the risk of the 2024E decline, which is currently forecasted at double digits....

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