Mastercard Inc. (MA)

A great business in a very powerful longer-term secular trend. We are more and more of a cashless society. Valuation is not cheap. There may be some longer-term concerns, that as people find new ways to pay for things their dominant franchise could be at risk. Thinks the company will be able to find ways to play in other spaces as well, such as buying something like PayPal to get in the electronic payment mechanism. Any time there is a pullback would be a good time to buy this. A very good, long term business.

This is a very good time to enter a position. All payment processors are ideal companies. Generally, they have a very good operational model with limited competition and high fees.

(Top Pick May 13/16, Down 5.34%) There is litigation. It is overdone. They have reserved money, but the suit could grow. The potential for international growth attracts them to it. They have a better chance of getting into China than V-N.

(Market Call Minute.) (Visa (V-N) or MasterCard (MA-N)?) He prefers Visa which has a much larger network, more retailers and more users.

MasterCard (MA-N) or Visa (V-N)? Both are growing. She prefers this one, although Visa has a more dominant market share, but to her it is trading a little rich. It also did an acquisition with Visa Europe. In theory that should add a little more growth, but she thinks it has been overblown and this one is a safer bet.

Prefers is a little better over Visa (V-N), which has to integrate Visa Europe. MasterCard is more exposed in the Third World, and as incomes grow and as electronic transaction usage is lower, you have growth in both income and electronic usage in the Third World. Trading at a 27X multiple. Target price of $112.

(A Top Pick Dec 22/15. Down 2.32%.) A transaction story where they make a little bit every time somebody swipes. In Europe, you have to process transactions within the country, making it more fragmented. They are trying to increase competition in Europe into a single payment area, which would give this company and Visa (V-N) more share. Also, we are having a real demographic shift. People who use paper and cheques are not spending as much. Dividend yield of 0.80%.

Transaction driven and doesn’t take any credit risks. Both Visa (V-N) and this company are strong and consistent growers, and trade at a premium to the market. This is less debit card oriented and more credit card oriented. More domestic where Visa is more international. Prefers Visa which has metrics which he believes are somewhat better. (See Top Picks.)

If you have owned this, you have made out like a bandit over the last few years. Something like a 30% compounded return. This does not have a credit risk; it is purely processing. Prefers this over Visa (V-N). Also, pays a small dividend.

(Top Pick Oct 6/15, Down 7.48%) Chinese growth is slowing. It has done well and he would stick with it. The business model is intact and Tap is working for them.

MasterCard (MA-N) or Visa (V-N)? Visa is a bit of a bigger company, and the question is really going to come down as to how they manage their currency globally. He understands that Visa is a better play if the US$ continues to rise, and this one is better if it starts to decline. That is splitting hairs, but if he had to decide between the 2, he would probably go with Visa because of its dominance in size.

Visa or MasterCard? He would never own these because he is a value investor. Both are high multiple stocks and highly correlated to consumer spending.

Highly cash generative. He really likes this business. Also, China is a potential, and entry there should be a 2016 event. Dividend yield of 0.78%.

This stock has a great chart. Generally speaking the trend line has been in place with a series of higher highs and higher lows. This looks very, very good and you are good to go.

The whole payment business is very attractive. Had some short-term headwinds, but overall they are growing. They are growing globally and one of the few growth areas in finances. (See Top Picks.)