Fidelity National Information Services Inc. is the second biggest payments processing company in the U.S. With over 31 billion transactions processed so far in 2022, it is also among the biggest globally. Despite its leading market position and top-notch financials, however, FIS stock has been a disappointing investment for over two and a half years now.
Shares reached an all-time high of $158.21 in February, 2020. Unlike many other stocks, though, FIS stock has yet to recovery from the Covid-19 crash. In fact, the price has now fallen below its March, 2020, low. Earlier this month, FIS barely held above $72. It closed last week’s trading below $78 a share, down over 50% from its 2020 record.
And while many fintech businesses were unprofitable or obscenely overvalued to begin with, FIS is neither. The company is a growing free cash flow machine, trading at a 2023 P/E of 10. Long story short, we think FIS stock is a real bargain and have added it to our portfolio. Besides, its weekly Elliott Wave chart below suggests the bulls might soon turn things around.
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The chart reveals that the uptrend from $9.13 in 2002 to over $158 in 2020 is a five-wave impulse. The pattern is labeled I-II-III-IV-V, where the five sub-waves of wave III are visible, as well. According to the theory, a three-wave correction follows every impulse. And indeed, the current crash, which began with the Covid-19 panic in March, 2020, can already be seen as a simple A-B-C zigzag retracement.
If this count is correct, the 5-3 wave cycle in FIS stock is on the verge of completion. The price is hovering just above the 61.8% Fibonacci level, where corrections often end. Once a correction is over, the preceding trend resumes. Given Fidelity National Information Services’ strong fundamentals, we have little doubt in its uptrend resuming. A bullish reversal can be expected very soon. A new all-time high is there for the taking in the long run.
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