David Sharek
David Sharek is stock portfolio manager at Shareks Stock Portfolios and the founder of The School of Hard Stocks.
Sharek's Growth Stock Portfolio has delivered its investors an average return of 18% per year since inception vs. the S&P 500's 10% during that time (2003-2020).
David's delivered five years of +40% returns in his 18 year career, including 106% during 2020.
David Sharek's book The School of Hard Stocks can be found on Amazon.com.
MasterCard has been under government scrutiny this year — first the United States and now Canada — over fees the company charges. I think these concerns are shirt-term and once the issues are settled MA will earn a higher valuation. The big picture shows rising economies all around the world. More people are using plastic, with more purchases per consumer.
The one-year chart shows the stock dipped in December with the Canadian news. The drop made earlier in the year was US related. MA is down 12% in 2010 even though profits are expected to 224% this year — this stock has some catching up to do in 2011. Profits are expected to climb 22% this year and 19% in 2011. Yes, this stock should be selling for 20 times earnings. By the way, this stock had a P/E of 18 in the fourth quarter last year.
Profits grew 13% last quarter (the slowest growth in a while) as revenue rose 5% for the second consecutive quarter. Management thinks International revenue should grow at greater than 10% a year during 2011-2013.
MasterCard is worth 20 times earnings in my eyes, with the current P/E of 14 this stock has solid upside of 40% in 2011. Looking out two years upside to fair value is 75% — solid for a Financial stock.
MA went public in 2006 and went on a tear higher because it kept whipping earnings estimates. I like that that the company beat by 40 cents last quarter, maybe that will be a trend.
