MasterCard, Inc. (MA)

Once the investment markets realize how bloated the pricing of this stock is, it should drop by around 50%.

> Overpriced, has to come down

The market's overconfidence has supported many financial stocks, including ones where growing unemployment and higher taxes will hurt revenue. At some point over this next year, the stock price will better reflect this risk and the lower expected profits.

MasterCard looks a little expensive at 36 x reported earnings. That fact coupled with the weakening macro-economics in the US suggest that transaction volumes will be dropping over the next few quarters (maybe longer). Also I am already starting to hear some convincing rumblings about a possibly weak Christmas retail season (see David Rosenberg of Gluskin+Sheff). Look to Q4 earnings in early 2010 to be a make or break report for MA.

I have not done nearly enough due diligence on MasterCard to make a definitive call but the negative factors I have referenced above, coupled with the fact that I believe Visa and MasterCard are more tied to the macro-economy than some other firms gives me confidence in making an underperfrom call in CAPS.

Transactions are not growing. Stock is overextended.

With tougher credit card approval rates and Obama's new credit card law on people ages 18-20, it will be highly unlikely to have skyrocket growth as it did 2 years ago. Its price is too high and overvalued to spur a comeback in the current market frame of a year.

Bearish on entire industry

Overvalued, harder times are coming with card losses and lower interest rates/fees.

I think that it is too high to sky rocket during the recovery. I don't think that it is a loser, but more of a hold and it won't outperform.
If we get that recovery that we want and need not all stocks can be ahead of the market.

I see credit card company stock getting worse before they get better, considering that double-digit growth is baked into its current price. The stock price just doesn't accurately reflect the company financial status right now and that means a downward pattern is in the near future.

Trading at almost 10 times book value and with damaging debt write offs lurking ahead, this stock can't help but drop like a rock.

Nope, you are not going to cure this problem by putting it all on the credit card. While they don't hold the actual debt, we are going to see transactional volumes go down big time. People will go back to cash. Yep, Yep.

Limited growth potential, cash flow issues, increased competition, legal troubles -- too many distractions from the path to profitability. And consumer credit default is ramping up over the next year. Cash is king!!!

Credit card companies will be the next industry to see a big jump in default rates, and Mastercard is already operating at a loss (TTM).

WARNING:
THIS STOCK TO CRASH BEFORE EOW.

down 15 to about 145

Wow

1/27/09 Pitch: Downthumb. Earnings 2/5/09, 9:00 AM. "Reuters is reporting that MasterCard said its Spendingpulse unit will suspend the public release of monthly U.S. retail sales data.- Jan 13 release." What are they trying to hide? Generally I view credit card debt as passe'. Consumers in a massive "reset", as the treasury secretary has stated. This means that MA's very high P/E is likely to skyrocket as revenue decreases, or more likely, the stock price will reflect a lower margin by plunging.

Cash is King