Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and a competitive advantage in established markets, preferably with a favorable, global trend as a support. And this in mind, MasterCard (NYSE: MA) is worth a review. The market sell-off and tumult of 2008 spared almost no stocks, and MasterCard took a beating, as well, with investors driving shares down to the $120-range from $320.
Sill, the overriding theme with this business model is that plenty of opportunities remain for MA to generate strong growth - from debit card growth, to emerging market expansion, to contactless payment solutions.
Further, while the U.S. economic recession will weigh on consumer spending transactions this year, the secular trend in both credit card usage and the increasing acceptance of debit card usage bodes well for MasterCard, particularly as economic growth resumes. The First Call F2009 / F2010 EPS estimates for MA are $10.32 / $12.12.
Stock Analysis: MasterCard is a moderate-risk stock. Consider buying a 25% position in MA now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your MA position in the first half of 2009. Sell / Stop Loss if you were to buy shares in this company: $85.
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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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Reader Comments (Page 1 of 1)
5-12-2009 @ 4:42AM
ronprice.price3 said...
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