MasterCard, Inc. (MA)

MA is a great company, they don't have any credit risk and they profit every time you swipe your card. With prices rising, fewer and fewer people are paying cash, especially at the pump, and they are defaulting to good old Master Card Plastic. MA on any pullback is a buy.

The dream business to be in. Fancy collecting a minuscule fraction on every transaction going through a computer. As far as I know, this is the only quoted credit card company - VISA is jointly owned by banks. As number two in the field, there is room to grow. Number one defends, number two attacks. Reasonable P/E. Dividend is a big fat zero. It seems likely that mangement and board will wake up one day as to the purpose of the company. This is a recent float and profitable floats often produce stellar performance.

MasterCard processes the transactions, they do not have any exposure to credit risk. As the use of "plastic" money grows in convenience, acceptance and safety, the number of transactions (and revenue) will increase. The sell-off yesterday was WAAAAY overdone. I'm a buyer - right here, right now!

Global trend of more people using plastic tomorrow than today. Less people using paper tomorrow than today. More people using debit than credit. Worldwide trend to mass expansion of financial tools for the world's largest populations. Visa can't get to the market fast enough. Upside, upside and a wonderfully scalable underlying business model. No need to worry about pricing power. Makes money while you sleep every time a transaction is processed worldwide.

Consumer credit is the next to fall. I realize MA doesn't directly carry and debt risk, but once the S hits the fan no one's going want to be around anything related to consumer credit.

Plus valuations are a little ridiculous for what they do.

MasterCard Worldwide is a driving force at the heart of commerce, enabling global transactions and bringing insight into the payments process to make commerce faster, more secure and valuable, to everyone involved. As a critical link among financial institutions and millions of businesses, cardholders and merchants worldwide, MasterCard provides services in more than 210 countries and territories.

The global payment industry has been on the boom with a huge opportunity to be exploited, as people move away from cash and writing checks to electronic forms of payment. Of late there has been a shift in balance of power in terms of choice of payment towards consumers rather than towards merchants. Its brand strength helped post revenues of $1,768 million till date up 25% year on year.

The biggest hurdle for the company would be the New Zealand Commerce Commission civil proceedings against MasterCard for anticompetitive arrangements in setting interchange fees. The penalty for the same could be to the tune of US$6.6 million per breach or three times the commercial gain resulting from the breach or 10% of a company's turnover. Moreover they have pending lawsuits by various governments and regulatory bodies of European Union for whose legal liabilities are still not known with projections of consuming upto 10% of the company’s value. Though, its price is almost twice now, after getting listed at a premium, the attitude of its previous member banks has been to reduce their exposure to the company.

The Wal-Mart’s Sam club deal does not seem to have much of an impact as they have often been complaining of high cost associated with credit card and squeeze the suppliers. Though the company has good growth prospects with it strategy of flooding the globe with its cards and launch of Single Euro Payments Area, the litigations charges hinder its valuation thereby causing uncertainties over its future.

Mastercard is way ahead of the game in terms of touch and go card technology and will start taking substantial market share from Visa. Their POP marketing is very agressive and will demonstrate that they are the kings of small purchase credit use (the bulk of spending).

Go MasterCard! Look at those earnings, a whole 30c per share and share price of only $100. At this rate in 4 quarters I could have what, $1.20? Wow! That would almost enable me to keep up with inflation!!! And what every will I spend my 15c dividend on. Lets see, if I had $10,000 invested, I'd get a whole $15, and with 4 quarters, that would be $60/year, or a dividend yield of 0.6%.

Earnings were only expected to be $0.17 and you were buying this stock at over $100. You've got to be kidding!!!!!

This is a mature company, as such, it is currently a strong sell to $50, and then only to watch and see if they settle legal problems and actually manage to have some decent earnings relative to share price.

And personally, I wouldn't buy it even at even $25, there are lots of stocks that have way better earnings.

MA has a 31% market share , 2nd to visa(the stock should not be penalized for being no.2). The card payment market is a $5.4 trillion market and there is plenty of room for growth in MA's case. 43% earnings growth 2005-2006 and estimated earnings growth 19% 2006-2007, cash flow valuation: $4.20 per share that translates to approx 76-80/share. MA is in the perfect position to take advantage of the global trend toward card payments.

Great franchise, can only increase its penetration into markets where it has little or no presence. The possibility of new deals ie ( Sam's Club) to accept Mastercard is another revenue generator for the company.

Everybody seems to use credit cards for all items purchased, putting off there payments for a month or more. Interest rates on cards are higher than bank rates plus the money is easier to obtain.

I bought the stock at its IPO at $43, and I am still holding it. I am a long-term investor, and I only invest in the companies I see with great potential.

MA is a great company with a good business model. As far as I see, $100 a share is undervalued for the company like MA.

One thing I learn about stocks is it's a rollercoster. If you are a long-term investor and if you do not care about the short-term swing, it's still not too late to invest in MA.

It's just my 2 cents.

I decided to go ahead and add this to my CAPS portfolio even though my wife got a MUCH better cost basis in real life ($66.01). Watch, now that I picked it, it will come off of it's peak. If it does, oh well.

MA is not a lender - the business model is sound and more and more people will use MasterCard to purchase goods and services. The internet will become the defacto shopping medium in years ahead.

MA growth is international.

Everyone uses creditcards. Mastercard is one of the biggest. The economy has been going up which means more people are buying. People also tend to run up alot of debt. Creditcard companys charge alot of instrest. That means big bucks for the company and because of great management that is passed down to us.

MA has saturated the market. Will people really take on more debt right now? There's a temporary sting that people have against owning debt right now as a backlash from the housing crunch. Give it a year before people will start spending more than they have again.

What a great service! What a great product! Why did I only buy it CAPS (twice) !! Maybe this is a lesson in looking beyond present valuation to sustainable competitive advantages.

Global reach should limit exposure to US downturns and a weaker dollar will only enhance profits. I believe MA has made inroads with 4-5 top banks in China. Additionally, I believe there is a push for increased credit card use along the eastern coast of China. Combined with the 2008 Olympics, I believe adding to a current position on present weakness is a wise move.

Folks are in the "Charge-It" habit and that's not going to change anytime soon.