| Stock (Symbol) | Stock Price | |
MasterCard (MA) |
$339 |
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| Data is as of | Expected to Report | Sector |
September 26, 2011 |
Oct 31 |
Financial |
| Sharek’s Take | ||
 MasterCard’s gone from $271 to $339 since my last research report. The surge in the stock has taken MA close to its 2011 Fair Value. MasterCard’s been powering forward in a stock market that’s crucifying other Financials. MasterCard doesn’t have mortgages to worry about.The company is growing fast: the number of processed transactions grew 17% last quarter. Debit volume grew 20% and credit volume increased 7%. All these figures were above expectations — as was profit growth. The news sent the stock up 13% to an all-time high. MasterCard’s growing rapidly Internationally. Purchase volume in Asia and Latin America grew 25%. U.S. volume growth was 11%. |
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| One-Year Chart | ||
 MA’s a market leader and a financial. This ten-year chart is great, especially considering the market’s been in a funk this year. The negative here is the P/E used to be better. MA’s P/E gone up from 15 to 16 to 19 in the last three quarters. That’s taken out some upside potential.Profit growth has been solid the last three quarters, estimates are strong. |
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| Earnings Table | ||
 Revenue growth is getting stronger: 5% 4QtrsAgo, 11% 3QtrsAgo, 15% 2QtrsAgo and 22% LastQtr.Management thinks International revenue should grow at greater than 10% a year during 2011-2013.MasterCard killed it by crushing estimates by 55 cents last quarter. The company is on a roll.Annual Profit Estimates continue to climb, although slowly. Quarterly estimates are good. Estimates are solid for the next few quarters, and there’s time for these figures to increase. The company has good momentum — so good that I wonder if the economy is actually going into a recession. |
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| Fair Value | ||
 MA isn’t on sale anymore, but still provides solid upside for a conservative company. 25% upside to Fair Value next year is good. |
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| Ten-Year Chart | ||
 I’m pleased to see MA hitting all-time highs. That’s really good considering the Financial Crash of 2008 is still haunting most Financial stocks.Profit growth is expected to be up 26% this year, and the estimate for 2012 (not shown) is 18%. This stock is worth 20 times earnings, easy. Next quarter if the economy holds up I may think this stock is worth 22 times earnings. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
7 of 21 |
MasterCard is a stock market leader this year. Unfortunately the move higher has diminished some of the upside potential the stock had. MA is ranked 7th in the 21 stock Growth Portfolio Power Rankings and is ranked 7th in the 11 stock Aggressive Growth Portfolio Power Rankings. MA is timely right now, so go with the flow. | |
Aggressive Growth Portfolio
7 of 11 |
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