|By Nathan Young|
Mastercard is in the industry of electronic payments, with their most familiar being what is in the pockets of many Americans. As the title indicates, this company has the ability to ride a wave that could change the way currency is viewed. With the introduction of more and more electronic forms of payment as well as crypto currency, the ideas seem endless. A new one we all may see in the future is a debit card that allows you to spend your crypto currency at stores that otherwise wouldn’t normally accept it. Enough about the future, let us look at the here and now.
Taking a look at an 8-K filing, Mastercard has posted a third quarter net income of $1.2 billion or $1.08 per diluted share. Third quarter gross dollar volume is up 7% along with purchase volume up 5%. How Mastercard makes money is they collect a very small percentage fee every time a card is swiped. The rates very depending on certain items, but the more a company accepts the swipe of a debt card, the more money Mastercard makes. Net revenue for the third quarter was $2.9 billion, or an increase of 14% compared to the same period in 2015. Overall, the fundamental numbers at a quick glance seem healthy.
Switching to the chart, the price has been moving in a very healthy pattern. From the beginning of 2016, the stock has proved nice returns for investors. Right now, the chart appears to be at a high and waiting for a pullback might be the best situation at the moment. Patience is key, as you do not want to purchase a stock at the current highs.
Taking a look the company’s latest 10-K, we can see that they cite competition and technology. Being in the electronic transfer of money industry, it is crucial to stay ahead in technology. Items such as Apple pay and Samsung Pay force companies like Mastercard to innovate to maintain market share. Secondly, security is obvious, but this could cripple a company such as Mastercard if customer information is compromised. People would quickly switch to a competitor and never look back. Lastly, they have to ensure that services will not be interrupted because if you stop the flow of peoples money, again, that will give them more reason to switch card companies. Interrupting the flow of people’s money is the quickest way to have them switch.
Mastercard seems it would be a solid addition to a portfolio, due to the fact the underlying numbers at a glance appear healthy and the price movement of the stock appears normal. Being in this sector might be the place to be in the near future. As with any investment, be sure to consult a professional to ensure you financial goals are being met.
|This story from Macroaxis reported on December 7, 2016 contributed to the next trading day price decline.The trading delta at closing time to the next closing price was 0.41% . The trading delta at closing time when the story was published to the current price is 55.8% .|