| Stock (Symbol) | Stock Price | |
MasterCard (MA) |
$84 |
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| Data is as of | Expected to Report | Sector |
February 9, 2015 |
Apr 29 – May 4 |
Financial |
| Sharek’s Take | ||
 MasterCard looks to have its second dead money year in a row, thus I will sell the stock from the Growth Portfolio today. MA peaked in the 4th qtr of 2013 as its P/E got up to 26. That P/E isn’t too bad, but when profit growth slows to the teens as it has, the stock has to come down a bit until its P/E is more reasonable. For more than a year now the stock hasn’t gone anywhere, and I don’t feel it will as the stock has a P/E of 24 and company is expected to grow profits 11%, 11% and 10% the next three quarters. Today MA is $87 and my 2015 Fair Value is $77. The 2016 Fair Value is $92 which is just 6% away. I’m not waiting one-to-two years to make 6% and will sell my shares and look to get back in later. |
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| One-Year Chart | ||
 21% profit growth last qtr is the only thing in green along the bottom of the chart, and the Estimates make it look like growth will slow a lot. With this kind of growth ahead 24 times earnings is a bit high when you consider what lies ahead as well as the Est LTG of 17% per year. |
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| Earnings Table | ||
 Last qtr, sales grew a modest 14%, and that’s what they usually grow at. Profit growth was 21%.The company only beat earnings estimates by a penny last qtr. MA’s Annual Profit Estimates haven’t gone up in the last year, rather they have gone back-and-forth with the end result a lower 2015 figure than we had 4QtrsAgo. Quarterly profit growth of 10% to 11% the next three qtrs doesn’t look promising and these estimates just got reduced as well. |
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| Fair Value | ||
 My Fair Value on this stock is $77 and MA is $10 higher than that today. I held the stock during the past year even though I didn’t see any upside and I didn’t get anything out of it. I’m not about to hang around another year. |
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| Ten-Year Chart | ||
 Stock’s got a beautiful ten-year chart but notice profit growth has been slowing. Now only 13% growth is expected in 2015, which is way below the 20% I like to have in a company I own. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
N/A |
MasterCard is a quality company that delivers profits every year, but I see profit growth slowing to around 10% to 13% this year and with a 24 P/E this stock is probably be dead money. Although I bought MA at $24 and would like to hold the stock for many years, I have to try to make my clients a decent return on their money this year and thus will sell MA from the Growth Portfolio today. |
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Aggressive Growth Portfolio
N/A |
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