Did you get a chance to buy Mastercard in April? If you did, you're up a smart 15% or so - not bad in this market. Further, I'm Reiterating my Buy rating for Mastercard (NYSE: MA), first recommended on April 13 2009 at a price of $176.06.The overriding theme with this business model is that plenty of opportunities remain for MA to generate strong revenue 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 near-term, the secular trend in both credit card usage and the increasing acceptance of debit card usage bodes well for Mastercard, as economic growth resumes. The First Call FY2009/FY2010 EPS estimates for MA are $10.93 to $12.75.
Stock Analysis: Mastercard is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 50% 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 75% of your MA position before October 2009. Sell/Stop Loss if you were to buy shares in this company: $85.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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