| Stock (Symbol) | Stock Price | |
MasterCard (MA) |
$399 |
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| Data is as of | Expected to Report | Sector |
February 15, 2012 |
May 3 |
Financial |
| Sharek’s Take | ||
 MasterCard had a good quarter. Profit growth last quarter was 28%. That’s good but the prior two quarters were great. This deceleration on profit growth takes the stock down on a notch. Additionally, other financial stocks (like banks) are hot again and that could move money out of timely financials like MA and Visa (V) and into the JP Morgan’s (JPM).MA continues to tell us 20% profit growth is ahead. A while back, management stated 20% profit growth was going to be happening in 2011-2013. That gave me certainty MA would be a solid stock. The company just reiterated the 20% profit growth objective along with 12-14% revenue growth. |
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| One-Year Chart | ||
 MA’s on a tear. Now unfortunately the stock’s not quite the bargain it used to be. The company only beat by a little bit last quarter, and barely raised profit estimates. With Estimates for the next two quarters set at 23% and 17%, the P/E of 18 isn’t that cheap. The P/E’s usually lower. Estimates are usually higher. |
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| Earnings Table | ||
 Profit growth decelerated last quarter from 59% to 28%. Revenue growth was 20% last quarter, down from 27% the quarter before.What’s changed since last quarter? MA only beat by a little instead of a lot. LastQtr’s beat was only by 4 cents, the company had beat by a total of $1.36 the prior two quarters. Annual Profit Estimates didn’t jump like they usually do. 17% profit growth is expected this year, 17% next year. MA should beat to get that 20%. Quarterly estimates look good, and are increasing somewhat. |
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| Fair Value | ||
 So MasterCard stock is touching $400, should be $500 later in the year, and $600 next year. |
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| Ten-Year Chart | ||
 Such a pretty ten-year chart. This stock was a bargain in late 2008-early 2009. In 2008 Q4 MA’s P/E was 14 and 2009 profit growth was expected to be 18%. In 2009 Q1 the stock has a 15 P/E but profit growth was expected to be 14% for the year. At the time, 2009 profit estimates were on the decline ($11.14 to $10.05 to $10.31) but by the end of the year the company came through ($11.19). |
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| Power Ranking | Bottom Line | |
Growth Portfolio
5 of 20 |
MasterCard is still a solid stock with good upside potential. It’s just not as timely as it was last quarter. The stock is highly ranked in the Power Rankings because it is still better than a lot of other stocks we own. MA is ranked 5th in both the 20 stock Growth Portfolio and 10 stock Aggressive Growth Portfolio Power Rankings. |
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Aggressive Growth Portfolio
5 of 10 |
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