Trade-Ideas LLC identified

MasterCard

(

MA

) as a momo momentum 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 $341.9 million.
  • MA has a PE ratio of 3.
  • 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 0.7%.

'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, 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 0.8%. MA has a PE ratio of 3. Currently there are 20 analysts that rate MasterCard a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for MasterCard has been 3.8 million shares per day over the past 30 days. MasterCard has a market cap of $108.5 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.28 and a short float of 0.7% with 1.91 days to cover. Shares are up 14.4% year-to-date as of the close of trading on Thursday.

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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, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 26.9%. Since the same quarter one year prior, revenues slightly increased by 1.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • MA's debt-to-equity ratio is very low at 0.24 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 1.29, 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.
  • The gross profit margin for MASTERCARD INC is rather high; currently it is at 60.95%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 38.61% significantly outperformed against the industry average.
  • MASTERCARD INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($3.35 versus $3.09).

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