| Stock (Symbol) | Stock Price | |
MasterCard (MA) |
$77 |
|
| Data is as of | Expected to Report | Sector |
May 30, 2014 |
Jul 28 – Aug 02 |
Financial |
| Sharek’s Take | ||
 MasterCard’s Annual Profit Estimates and quarterly estimates all got trimmed for the second straight quarter, and at 26 times earnings the stock’s at a high point I think. For the 2nd straight qtr I’m taking my Fair Value P/E on MA down. Last qtr it was from 28 to 25, now its 25 to 23. Profit growth is only expected to average 15% the next four quarters, but MA management has boldly stated — and proven — earnings will grow better than 20% a year for the long-term. I think this stock is overvalued by 10% right now, but its a great stock to own for the long haul. |
||
| One-Year Chart | ||
 Look at that quarterly profit growth. Between 16% and 18% in each fo the last three quarters. When you see that, the 26 P/E seems high. Also notice the stock had a solid run last year. I think MA takes a breather this year. |
||
| Earnings Table | ||
 Profit growth was 18% last quarter, on a 14% increase in revenue.MasterCard beat by a penny and isn’t beating the street like it used to. Annual Profit Estimates declined a bit for the 2nd straight qtr. Quarterly estimates are decent, but are getting whittled away. |
||
| Fair Value | ||
 MasterCard’s P/E was 25 last quarter and now its 26 even though things have gotten slightly worse. I’m taking my Fair Value P/E from 25 to 23, this stock might be around this price a year from now. |
||
| Ten-Year Chart | ||
 This has been a great stock since it went public, but notice along the bottom that the annual profit growth rate has declined for three straight years. |
||
| Power Ranking | Bottom Line | |
Growth Portfolio
23 of 25 |
MasterCard is 10% overvalued right now because it has a P/E of 26 and profits are growing at a mid-teens rate. I see this stock basing for a year or so. I wish to stress this is a great company and long-term investors should stick with the stock. Right now MA is ranked 23rd of 25 stocks in my Growth Portfolio Power Rankings. MA isn’t good for the Aggressive Growth Portfolio. |
|
Aggressive Growth Portfolio
N/A |
||
