Xoom

Dept: Is this a changing of the guard? Investors who buy Xoom thinking it will be next generation giant might end up disappointed. In contrast, those who are willing to wait through a difficult 2013 for Western Union will likely be rewarded, according to Globe and Mail. The company, like many, ran headlong into the global recession. Its customers are primarily unbanked immigrants who work in the developed world and send money back to relatives in less-developed countries. As joblessness grew in the U.S. and Europe, Western Union clients had less money to send or settled for cheaper services. Revenue for 2013, expected by analysts to come in around $5.5-billion U.S. , will be just a couple hundred million dollars more than 2008 levels and The sexy new name in the sector is now Xoom Corp., an online-only upstart that went public in February and has traded at more than 60 per cent in excess of its IPO price. While Western Union and MoneyGram drift toward value territory, the yet-to-make-a-profit Xoom is priced, as one analyst says, as an online disruptor in the mould of Netflix or LinkedIn. As recently as the mid-2000s, Western Union posted double-digit revenue gains and increases in profit that topped 20 per cent a year. It was never the low-cost provider; it instead traded on its unparalleled network of agents that, today, has reached nearly 500,000 locations across 200 countries and territories. (www.immigrantscanada.com). As reported in the news.