Trade-Ideas LLC identified

MasterCard

(

MA

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified MasterCard as such a stock due to the following factors:

  • MA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $404.4 million.
  • MA has traded 1.2 million shares today.
  • MA is trading at 1.66 times the normal volume for the stock at this time of day.
  • MA crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on MA:

TheStreet Recommends

MasterCard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. The stock currently has a dividend yield of 0.7%. MA has a PE ratio of 28. Currently there are 18 analysts that rate MasterCard a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for MasterCard has been 3.7 million shares per day over the past 30 days. MasterCard has a market cap of $100.6 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.31 and a short float of 1% with 2.16 days to cover. Shares are up 1.9% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates MasterCard as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, good cash flow from operations and growth in earnings per share. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 21.7%. Since the same quarter one year prior, revenues slightly increased by 0.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • MA's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.24, which illustrates the ability to avoid short-term cash problems.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the IT Services industry and the overall market, MASTERCARD INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Net operating cash flow has increased to $821.00 million or 12.62% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -2.02%.
  • MASTERCARD INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MASTERCARD INC increased its bottom line by earning $3.09 versus $2.57 in the prior year. This year, the market expects an improvement in earnings ($3.37 versus $3.09).

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