Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified MasterCard Incorporated 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 $506.9 million.
- MA has a PE ratio of 29.5.
- MA is currently in the upper 30% of its 1-year range.
- MA is in the upper 25% of its 20-day range.
- MA is in the upper 35% of its 5-day range.
- MA is currently trading above yesterday's high.
- MA has experienced a gap between today's open and yesterday's close of 0.6%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.
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More details on MA:
MasterCard Incorporated provides transaction processing and other payment-related services in the United States and internationally. It facilitates the processing of payment transactions, including authorization, clearing, and settlement, as well as delivers related products and services. The stock currently has a dividend yield of 0.6%. MA has a PE ratio of 29.5. Currently there are 17 analysts that rate MasterCard Incorporated a buy, no analysts rate it a sell, and 10 rate it a hold.
The average volume for MasterCard Incorporated has been 8.1 million shares per day over the past 30 days. MasterCard has a market cap of $88.3 billion and is part of the financial sector and financial services industry. The stock has a beta of 0.75 and a short float of 1.4% with 2.28 days to cover. Shares are down 6.9% year-to-date as of the close of trading on Thursday.
rates MasterCard Incorporated as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, expanding profit margins, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 20.5%. Since the same quarter one year prior, revenues rose by 12.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MASTERCARD INC has improved earnings per share by 7.0% in the most recent quarter compared to the same quarter a year ago. 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 $2.57 versus $2.19 in the prior year. This year, the market expects an improvement in earnings ($3.04 versus $2.57).
- The gross profit margin for MASTERCARD INC is rather high; currently it is at 51.08%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 29.30% is above that of the industry average.
- Net operating cash flow has increased to $1,199.00 million or 38.45% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 19.56%.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 47.90% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full MasterCard Incorporated Ratings Report.