Wednesday, October 25, 2006

Calls of Note Part 2

- Goldman is adding Western Union (NYSE:WU) to their Conviction Buy List with a price target of $25, implying 25% return potential. With solid 3Q2006 results and the beginning signs of stabilization in domestic and Mexico transactions now behind us, the firm believes the myopic focus on near-term trends should begin to slowly fade, and Western Union's compelling international expansion opportunities, the strength of its highly productive agent network, and its industry-leading 25% return on invested capital should garner more serious attention. They expect the December quarter to mark a trough for fundamentals, and recommend building positions in WU now.

Key catalysts for the stock are: (1) A potential preferable outcome from the hearing with the Arizona Superior court on October 30. 2) Further evidence in the December quarter (particularly post-elections) of stabilization in Mexico and domestic transaction trends.

Notablecalls: Expect to see buying interest in WU today and in the coming days. Picks in GSCO's Conviction Buy list have performed pretty well.

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