Stock of the Day
Mastercard
Monday’s Intra-day Price: MA – $107.28
This global payment solutions company provides services in support of the credit, debit and related payment programs of nearly 25,000 financial institutions. You should be familiar with their excellent “Priceless” commercials.
The stock enjoyed a great run starting in July 2006 after its IPO earlier last summer. It offered multiple entries during the first ten weeks of trading before making a 149% gain from a low of $43.48 to a peak of $108.51 in four months. The stock then started its current consolidation phase between $90.42 and $118.07 which has lasted for the past 18 weeks.
The stock has corrected along the 50-day moving average multiple times over the past three to four months and seems to be holding steady with institutional support. As the numbers show below, institutional buying increased during the most recent reporting periods so that can lead us to believe that this stock has major support and legs to make another run. Remember, Google didn’t stop its run after it doubled from $50 to $100. That stock actually went on to double multiple times and gave investors multiple opportunities to join the party.
Buy stocks moving higher; ones making new highs and don’t be afraid to grab shares above the triple digit threshold! GOOG, CME, SHLD, NVR can all serve as excellent examples of higher priced stocks making better gains than the garbage below $10 per share.
Longer term trend investors can establish a position now at the 50-d moving average or at least start to initiate a position by accumulating shares. Look for a confirmation on a move to the up-side above the trading range I have highlighted in blue on the weekly chart.
Next Earnings Date: 5/10/2007
Sector: Information Technology
Industry: Data Processing & Outsourced Services
Institutional Analysis:
Held by Institutions: 76%
Money Market: 208
Mutual Funds: 173
Other: 12
Number of New Positions: 136
Number of Positions Sold out: 74
Shares Bought last Period: 36.2 mil
Shares Sold last Period: 25.3 mil
Value of Shares Bought: $3.9 bil
Value of Shares Sold: $2.7 bil
Top Institutional Holder: Atticus Capital LP
5.9 mil Shares for 0.05% of Portfolio
Total Equity Value of Portfolio: $12.1 billion
Key Fundamental Numbers:
Market Cap.: $8.6B
Outstanding Shares: 79.75M
52 Wk Range: $40.20 – $118.07
Short Ratio: 2.06
Operating Margin: 13.90
Net Income $M: 50.19M
ROA (%): 10.10
ROE (%): 22.80
P/E (TTM): 28.41
P/E (Forward): 25.08
Price to Sales Ratio: 2.55
Book Value per Share: 29.69
PEG Ratio: 1.54
Price to Book Ratio: 3.58
Earnings per Share:
Next Quarter: $1.17
Last Quarter 0.31 – Surprise: 121.43%
Next Year: $4.24
Earnings:
Yearly (2006): 0.37
Yearly (2005): 1.98
Revenue (millions):
Yearly (2006): 3,326
Yearly (2005): 2,938
Bottom Line: MA is rated a buy in my book and I am grabbing shares today.
*This blog post is not a recommendation to buy this or any other stock. Please do your own due diligence and buy and sell at your own risk!
And what happens if they lose their anti-competitive lawsuit about price setting interchange fees in New Zealand?
And what about the pending lawsuits by various regulatory bodies of the European Union?
I think there is some real uncertainty here.
This is why the stock is consolidating. It is a must to note but I don’t trade based on possibilities; I trade based on charts and back that up with fundamentals.
Deborah,
I can be wrong but that is what position sizing and sell rules are for. I won’t be right every time.
Great post Chris, just wanted to send some link lovin your way man!
Do you think companies like Oxford (OXIHF) and Versatile (VV on venture) might have products coming to the market that might compete?
Don’t tell anyone, (as this is rather crazy to do), but I am holding through earnings this morning.
Wish me luck!
Good Luck TG – always a scary time but the reward can be nice!
I agree Chris. That is why I really don’t do it too often. GMKT comes to mind. 🙁 ow! ow! hehe