The now famous "toll bridge" reference to investing was made famous by Warren Buffett. This is not to say that you should literally invest in a toll bridge, but rather in the type of investment that works much like one. They make great growth investments when you can find them at the right price. As the name implies, if you are heading down a toll bridge or road, and you come to the toll stop, you must pay it. And if this bridge or road makes life easier for folks, well, you can expect them to pay the toll on a regular basis.

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A Beautiful Concept
The toll bridge is a brilliant way to think about investing. Find a business that makes its money by charging a small sum to a high-volume consumer base on a regular basis and you just may have something intriguing. Such is the case with payment processor Heartland Payment Systems (NYSE:HPY), a payment processor that focuses on the merchant side of the payment processing business. It's common to put Heartland in the same bucket as Visa (NYSE:V) or MasterCard (NYSE:MA), but they are not direct competitors. Indeed, the drivers of growth - consumer card use, same store sales, new merchant acceptance - are similar for them all, but Visa and MC operate in a "four party system", in which they connect merchants, cardholders, issuing banks and acquiring banks.

The difference is, Visa and MasterCard operate payment networks rather than focusing on the actual processing. Heartland specifically focuses on the merchants - the businesses that you and I go to to buy goods and services.

One important piece of history: earlier this year, Heartland's processing network was breached and the shares took a nosedive. The company has done an excellent job of fixing the issue and the ultimate cost to Heartland - estimated to be around $100 million pretax - will not damage the company's franchise over the long-term. Recently, the company announced a deal with Hypercom Corporation (NYSE:HYC) to provide the company with high-security payment systems.

Heartland's focus on small businesses means it has a huge market, as the vast majority of businesses today are classified as small business. Over the past 10 years, the company has tripled its market share and now processes more than $70 billion worth of transactions. (For related reading, check out Inside National Payment Systems.)

Compelling Future Growth Opportunity
Since 2003, Heartland's net revenues have grown from $138 million to more than $380 million; net income has gone from $9 million to more than $41 million. The company is expecting to earn about $1 per share this year. Today's stock price of $13 implies a very attractive upside over the next several years as Heartland continues to capture market share and strengthen its franchise. Before the payment systems breach, shares were nearly twice what they are today.

Over the past five years, EPS has grown by an annual rate of 25% and revenues by 25%, validation that this toll bridge type business has staying power. The company has a history of insider ownership and of returning excess cash to shareholders. As the company continues to take market share, the numbers will get better and shares could easily eclipse $30 in the next two to three years. The stock isn't bargain basement category today, but it's not expensive relative to the upside potential. However, if Mr. Market affords you a chance to grab shares in the single digits, it's a bet worth very serious consideration. (For related reading, check out Stock-Picking Strategies: Value Investing.)

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