StockCall Analysis on Western Union and MoneyGram: Getting Ready for
LONDON, January 30, 2013
LONDON, January 30, 2013 /PRNewswire/ --
Business Services industries had a tough year in 2012. The sector saw intense
competition resulting in costly price wars. Major Service providers like The
Western Union Co. (NYSE: WU) and MoneyGram International Inc. (NYSE:MGI)
resorted to deep price cuts, putting pressure on their margins. StockCall
analysts have completed in-depth technical analysis on these two companies.
The free reports can be downloaded upon registration at
The industry is also expected to see big changes in February this year as the
Dodd-Frank legislation is implemented. The new regulations will increase the
disclosure burden on the companies as these will be required to make wider
disclosures about foreign exchange rates and fees.
MoneyGram Expands Internationally
MoneyGram International Inc. is augmenting its business operations
internationally. It now has a 20,000 agent strong presence in Africa. The
company operates in Africa through its collaborator, Express Exchange.
MoneyGram International suffered net loss of $54.8 million in the third
quarter of the year, which was mainly attributable to the company's settlement
with the U.S. Attorney's Office, in connection with the Middle District of
Pennsylvania investigation. The stock continued its plunge after the result
declaration. Sign up now to read the complete technical and charting analysis
on MoneyGram International at
While the company is evolving and has inked quite a few new collaborations, it
still expects its fourth quarter and full year numbers to be on the
conservative side. It also moved its full year forecast to the lower side of
its previous projections. The company expects its revenue to grow in the range
of 7 to 9 percent while its adjusted EBITDA is likely to expand by 9 to 11
percent. While its stock performed well this year, so far, it is likely to
face pressure as its much bigger rival cuts down its fees for various money
transfer schemes. Such price wars may have negative impact on the company's
MoneyGram International stock is expected to show moderate growth this year as
the company continues to feel constant pressure from its much bigger rival
Western Union Co. [ Free technical Report on WU ] ^(1) . It also faces
competition from online payment processors such as PayPal.
Western Union Cuts Fees
Western Union, the largest entity in the sector, performed poorly in the
market. While its stock lost about a quarter of its value last year, the
company offered a good 3.70 percent dividend yield. It also approved new share
repurchase program worth $550 million. These steps are likely to help
reinstate investors' confidence in the stock. However, the company also faces
operational and strategic issues.
Western Union commands about 20 percent market share, but the share is
constantly declining due to smaller players working on razor share margins.
Lower fees charged by these outfits forced Western Union to slash its charges
for various transfers in Latin America. The move may help the company to
increase its volume, but lower margins are likely to cause negative impact on
the company's financial health. The company had made this announcement while
releasing its third quarter results and now is in the process of implementing
Western Union is also dealing with regulatory issues as it had to close about
7,000 of its Vringo outlets due to compliance concerns. However, in contrast
to the previous year, the company stock is expected to perform relatively
better. Western Union's new share repurchase program will also help investors
in recouping value.
1.Western Union Co. Technical Analysis [
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