Global Payments soars and Carvana sinks; A crazy story from Kenya
1) One of my favorite stocks, Global Payments (GPN), soared 16.5% yesterday...
I pitched the stock at the annual Stansberry Conference & Alliance Meeting in Las Vegas in October. And I shared my slides in my October 28 e-mail, when the stock closed at $85.63.
The stock drifted down after that, but my thesis was unchanged. So I listed it as one of my favorite stocks for 2026 in my January 7 e-mail, when it closed at $77.50.
Since then, the stock slowly ticked down... until yesterday, when it closed at $81.26 after the company reported solid earnings.
Fourth-quarter revenue rose 6% in constant currency, excluding dispositions. And adjusted earnings per share ("EPS") rose 11% in constant currency.
Global Payments also announced a share-repurchase authorization of $2.5 billion and that it's entering into a $550 million accelerated share-repurchase plan.
Lastly, the company announced a strong outlook for 2026:
- Adjusted net revenue growth of approximately 5%, in constant currency and excluding dispositions.
- Adjusted operating margin expansion of approximately 150 basis points.
- Adjusted EPS of $13.80 to $14, or growth of 13% to 15%.
Consensus analysts' EPS expectations for this year are $13.88. That means the stock is trading at a crazy cheap multiple today: only 5.9 times current-year earnings.
That's nuts for a high-quality, market-leading business like Global Payments.
I think it should trade at 20 times earnings – which would put the stock at $278, more than three times today's level.
My team and I published a full report on Global Payments for Stansberry's Investment Advisory subscribers back in June. In it, we go in depth on the company's business, financials, and valuation, then end with specific buy advice.
To read the full issue – and see our entire portfolio of open recommendations – become an Investment Advisory subscriber if you aren't already by clicking here.
2) Among my "Stinky Six" stocks, my least favorite, used-auto seller Carvana (CVNA), tumbled around 10% this morning...
And it's currently down more than 25% since I added it to my list of stocks to avoid on December 12, when it closed at $455.68. (I've written about the company 17 times, which you can see in this archive.)
The stock has been sinking since the company reported lukewarm earnings after the close yesterday.
While fourth-quarter revenue grew 58%, its adjusted earnings before interest, taxes, depreciation, and amortization ("EBITDA") was $511 million – lower than the average analyst estimate of $536 million. In addition, the company didn't give specific guidance for 2026.
I continue to think there's a good chance this company is engaged in misleading – if not outright fraudulent – related-party transactions to inflate its numbers. I outlined this in my January 29 e-mail featuring a critical report on Carvana published by activist short seller Gotham City Research.
Since then, Gotham has followed up with an update: Carvana: New Information Reveals That BridgeCrest Is the Lienholder – CVNA Must Explain How and How Much.
Another short seller, Abelian Analysis, raises additional questions in its thesis: Carvana: Subprime Auto in Prime Clothing.
My friend and famed short seller Jim Chanos added in this X post:
When levered companies like this get into trouble, their stocks can go to zero...
Avoid Carvana at all costs.
3) There's a well-deserved joke in our family that my parents would be late to their own funeral. Well, that was never truer than this morning, which led to one of the craziest, most dangerous adventures of my life – and that's saying something!
(Recall that I flew Tuesday night from Amsterdam to Kenya, where they've retired, to visit them for a week. Here's a video I took of us, their four dogs, and their friends on a walk in the tea fields yesterday morning.)
My friend David Berman of Durban Capital flew in last night from Tel Aviv to join us. As longtime readers may recall, he's one of the world's leading experts on retailers. That's why I've quoted him two dozen times in my daily e-mails over the years (archive here). He's originally from South Africa but lives in New York City now.
He had never been to Kenya – and after what we put him through this morning, he may never come back!
We had a 9 a.m. flight from Nairobi to Lamu, a beautiful island on the coast where my parents have had a beach house for 20 years. We were up at 6 a.m. with plenty of time for the one-hour drive to the airport – or so we thought...
My mom had planned to be up an hour earlier at 5 a.m., but my dad's alarm didn't go off. So by the time she had packed boxes of food – their house is far from any supermarkets – we didn't get on the road until 7:20 a.m.
It was going to be tight, but we thought we were going to get there in time... until we hit traffic. As we sat there, I was in a panic because I'd set up several meetings related to selling my parents' beach house for them (if you're interested, let me know).
So I decided to get out of the car and hop on a "boda boda" – a light motorcycle taxi that's ubiquitous in Kenya.
David was freaking out, too, not wanting to miss the flight – but also not wanting to risk his life on the back of a boda boda, darting in and out of traffic, without a helmet!
Eventually, with great unhappiness, he decided to join me, and off we went on two boda bodas... Here's a truly hilarious video I took with my Ray-Ban Meta glasses and three pictures of the escapade:
Maddeningly, the traffic soon parted such that, after half an hour, my parents and their driver caught up with us, so we hopped back in the car. Our death-defying ride was for naught!
We pulled up to the terminal at 8:45 a.m. David and I raced inside, cut the huge line of people checking in for later flights, and begged the gate agent to let us on the flight.
Initially, the answer was no, especially since we didn't even have boarding passes – another whiff by my parents. But I begged some more and pointed out that we only had shoulder bags (my minimalist packing paid off again), and she relented.
We raced to the gate and made the flight with seconds to spare – but had enough time to take these two pictures:
After the ordeal, we were able to relax in Lamu:
But what about my poor old parents, who of course missed the flight? Well, my sympathy for them is limited – heartless son that I am... They experienced what I've labeled as my No. 1 Immutable Law of the Universe (which my daughters are sick of hearing): "If you are a dumbass, there will be consequences!"
The next flight to Lamu with two available seats on the local airline we flew, Jambojet, wasn't until Monday. But there was a 2 p.m. flight on a different airline, Safarilink, from the nearby domestic airport. So my parents drove there, were first on the standby list, and luckily made the flight!
So, all's well that ends well. David and I survived, my parents learned a good lesson, and we're all here, enjoying a drink at the famous Peponi Hotel in Shela:
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.