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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Rocket Stocks to Buy Before the World Ends

The payment network business is lucrative for a few reasons. First, it's important to remember that MasterCard is the network, not the card issuer. Since it doesn't extend credit itself (its partner banks do), it doesn't carry any credit risk on its balance sheet. Instead, MasterCard earns its money by taking a tiny cut of every transaction that it facilitates, taking huge margins for its trouble. Because barriers to entry are extremely high for the payment card business, it's unlikely that we'll see any unfamiliar names eating share from MA and its big peers -- even though newcomers like PayPal and Google (GOOG) are making a presence in retail point of sale systems, they're not close to seeing big dollar volume yet.

Ultimately, a rising tide should lift all ships in the payment industry, at least in the short-term. As more consumers around the world transition to the security and convenience of electronic payments, growth opportunities will continue to present themselves to MA's top line. That's why we're betting on shares of this Rocket Stock right now.

Mylan

Generic pharmaceutical maker Mylan (MYL) is seeing similar price performance this year. Year-to-date, MYL is up more than 30% after a handful of new FDA approvals helped to spur guidance higher on the year. Mylan is one of the biggest generics manufacturers in the world, carrying more than 900 products sold worldwide. Generics weren't enough for Mylan, though. The firm has turned to proprietary drugs to find bigger margins, turning out successful specialty offerings headed by the EpiPen.

Mylan's manufacturing capabilities give it a big advantage right now. Because the firm has facilities that are more sophisticated than most other generics makers, it can compete in the biosimilars business, a more challenging space that's rewarded by much higher margins and much less competition. At the same time, as patent-protected specialty drugs become a more significant portion of sales, the firm should establish a big moat compared to other generic drug makers.

Financially, Mylan is in decent shape, even if its debt load is a little higher than at peers. Double digit margins and ample cash generation capabilities help to offset that. With an aging global population likely to create tailwinds for drug firms over the medium-to-long-term, Mylan is well positioned for even more upside in 2013.

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