Trade-Ideas: MasterCard (MA) Is Today's New Lifetime High Stock

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.

Trade-Ideas LLC identified MasterCard ( MA) as a new lifetime high 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 $274.8 million.
  • MA has traded 151,814 shares today.
  • MA is trading at a new lifetime high.

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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 0.7%. MA has a PE ratio of 28. Currently there are 18 analysts that rate MasterCard a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for MasterCard has been 4.1 million shares per day over the past 30 days. MasterCard has a market cap of $102.6 billion and is part of the financial sector and financial services industry. The stock has a beta of 1.36 and a short float of 1.6% with 5.16 days to cover. Shares are up 6.9% year-to-date as of the close of trading on Tuesday.

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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, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 22.5%. Since the same quarter one year prior, revenues slightly increased by 2.7%. Growth in the company's revenue appears to have helped boost the 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 1.43, which illustrates the ability to avoid short-term cash problems.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • MASTERCARD INC has improved earnings per share by 21.9% 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 $3.09 versus $2.57 in the prior year. This year, the market expects an improvement in earnings ($3.44 versus $3.09).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 17.2% when compared to the same quarter one year prior, going from $870.00 million to $1,020.00 million.

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