Mastercard Incorporated (MA)

All Comments on MA

  • commenter
    globalHOBBIT
    Aug 11 07:22 AM
    AmEx's Pain Likely Discover's Gain [view article]
    As it so happens I am a Morningstar Premium Member for many years now and Morningstar thesis and valuations for AXP and DFS in the 'Analyst Report Summary' were both written by Michael Kon. Yes they both get 5 stars for very different reasons. As a M* prem member you should read M Kon's analysis to see why DFS won't be in as good a place as AXP after this credit crunch is over. Goldman's analyst are of the same opinion as Morningstar on AXP and DFS. DFS is mainly a North American operation which limits its growth prospects vis-a-vis AXP's worldwide operations, especially in emerging markets where AXP is far outspending DFS in developing new customers. I like just facts no emotions in stock choosing, commodities, well that's different. Reply
  • commenter
    mrbill for V
    Aug 11 06:37 AM
    AmEx's Pain Likely Discover's Gain [view article]
    Frank: Interesting viewpoint, "globalhobbit&quo... perhaps you should become a Morningstar Premium Member. DFS & COF are rated 5 stars each and yes they will never become Visa. However there is room for all and each has a different business model. Should there be only one car company? Reply
  • commenter
    globalHOBBIT
    Aug 11 06:11 AM
    AmEx's Pain Likely Discover's Gain [view article]
    Why was this article no surprise to me when I came to the disclosure at the end only to see: [long: DFS]. Nothing like a fair and balanced credit report. Looking for a job at Wamu, LEH or MER as all honest analyst positions at Bear Sterns and CFC for unbiased truth telling are full up. DFS is in worse shape than even Capital One/COF as very well outlined in Morningstar's reports. Reply
  • commenter
    galen c
    little
    Aug 11 05:00 AM
    AmEx's Pain Likely Discover's Gain [view article]
    So often these writers waste my time. Reply
  • commenter
    montag
    Aug 11 03:41 AM
    Credit Makes the World Go 'Round [view article]
    What does all this have to do with Visa and Mastercard? Reply
  • commenter
    User 172125
    Aug 05 08:55 PM
    The Long Case for American Express [view article]
    Just wanted to stop by and wish you all the best of luck on V/AXP/MA- and even DFS holdings. I have locked in my final V positions- and will still trade the shares - but have really spent enough time on the entire plastic revolution.

    Final thoughts: Visa is a great long term play- and I have no doubts about that. Wish you all the best of luck on all your holdings and making it through the rest of the year in one piece!

    GOOD LUCK     Reply
  • commenter
    mrbill for V
    Aug 05 05:36 PM
    The Long Case for American Express [view article]
    User164258 & Markb: If you really like AXP, or DFS and have a long term time horizon, at these levels it wouldn't be a serious gamble. Fact is these stocks will experience all time highs as well as lows just like everybody else. These companies will not go out of business in your lifetime, merger or two, maybe Bankrupt Never. However VWINNER is right. Reply
  • commenter
    Frank Rong
    Aug 05 04:56 PM
    How Much Credit Is Too Much? Where AmEx Went Wrong [view article]
    no Reply
  • commenter
    markb
    Aug 05 04:47 PM
    The Long Case for American Express [view article]
    One reason to look hard at AXP now...Buffett has 13%. Buffett said he is looking for something big. Buffett has liked AXP for 40 years. According to Motley Fool, AXP changed bylaws to make takeovers easier (50% vs 66%). AXP would benefit from not being public. Buffett likes Chenault. Would be surprised if Warren isn't sniffing around at this PE. Reply
  • commenter
    kurt walter
    Aug 05 01:35 PM
    The Long Case for American Express [view article]
    Too much credit card debt is going to bite all of these companies. Reply
  • commenter
    Frank Rong
    Aug 05 10:40 AM
    Card Issuers: Facts and Fictions [view article]
    Steve,

    Let's move on from this topic, and we can find out what happen to these four companies in two or three years.

    I wrote two more articles I want to know how you think     Reply
  • commenter
    User 172125
    Aug 05 10:39 AM
    The Long Case for American Express [view article]
    Yes- 164258- You are right AXP is cheap- and there is a reason that Warren Buffet is AXP's largest shareholder.

    There model is not broken- agree 100% - and their default rates are actually reasonable- BUT- you must be willing to sit on your shares- and I repeat the same question; WHY??

    Why would you want to do so- when you can actually make money. You will have months to move into AXP- there is no rush. If anything- why not just buy some LEAPS on AXP if you really want to sit on the shares- without tying up all your capital?

    V is still a much better buy right now.     Reply
  • commenter
    User 172125
    Aug 05 10:31 AM
    Why I'm Still Out of Mastercard and Visa [view article]
    Yes- truth in vesting- It is smart to take profits, buy on dips, trade on bear rallies- now tell us something a 17 year old doesn't know.

    One thing I can't figure out about so many of you is why you can't wrap your arms around the safety net that V offers instead of taking uneccesary risk trading a 'fad' stock like an IPI.

    If, all you had done is buy and sell on every 5$ price movement on V since day one- you could have easily had 50 solid (and easy trades) under your belt. Is anyone naive enough to think the floor is going to fall out on V- and suddenly the shares will be trading in the 50s??

    Once again- we see a post about a one hit wonder while ignoring the fact that you have a solid base from which to exprerience multiple profits without the risk associated with many of today's sectors (tech/energy/banking/m...

    Reply
  • commenter
    SkipinCA
    Aug 05 10:26 AM
    The Long Case for American Express [view article]
    Well Done! How refreshing to find someone on this site that actually reads financial statements!

    AXP is the largest card issuer in the world based on total billed business. It billed $181B in 2Q08. The next largest was Citi at $106B (1Q08). That is 71% more than its closest competitor. They have about 24% of total US purchase volume. Discount revenue was up in 2Q08 by 8.7% YOY and their average discount rate was 2.56%. I am pretty sure that is significantly higher than V or MC. (Let me know if you have that stat) You did not mention their superior rewards program that they can afford through their higher rate that locks in customers. Also, Basic cards in force grew 11% (7% US, 17% non US). Their average FICO at acquisition in 1Q08 was 733 charge, 750 credit. This company produces a great ROE of 35% in normal times and they expect to grow EPS 12-15% per year again in normal times. Their earnings declined 36% this quarter. But all in all, this is a great world wide franchise producing great returns with shareholder oriented management and is not going to go away.

    The big issue right now is increasing credit losses on their LOAN portfolio. As you point out their CC receivables are showing higher wirte offs but it is not that bad. It is their loan portfolio of $49.7B ($77B including their OBS securitization) that has blown their credit models and incured a 141% increase in 2Q08 YOY. And the company has said they can't predict where it will stop.

    So how bad can it get? Looking at a historical chart provieded in their 2/08 presentation, Net Write Offs went as high as 10% in '91 and dropped to around 7% the following year. It reached 7% 2 more times in '98 and '02. It looks like it averages around 4.1%. AXP would make the case that they are better at credit evaluation now. Who knows? Their charge off rate in 2Q08 was 6.7% on a managed basis or $827M on a loan portfolio of $49.7B. This write off rate and the related provisioning caused them to lose money in their US card business for the quarter. So if their write off rate increased to 10% over the next 12 months, that would be an additional $416M in expense per quarter on top of the $827M. I assume the loss provisioning ultimately equals the write offs. While not good at all, the company would still make money. Pretax earnings for this depressed quarter were $766M.

    Bottom line - this is a well run company with a very powerful worldwide brand that produces great returns on capital. It is going through a significantly difficult time. Like with all financial companies you never know how bad it will be until its over. But 12-18 months of below target performance does not kill the company. The stock is trading at depressed levels. At $36 per share it is around 15-16x depressed earnings. If you look out 3-5 years and assume the company will be earning what it did in '07 it is trading at 10.6x. Their model is not broken. The stock is cheap.     Reply
  • commenter
    User 172125
    Aug 05 10:19 AM
    The Long Case for American Express [view article]
    If an investor is willing to sit on AXP for a minimum of 1 year before seeing any real action- it is still a good company- but why would you park your money there?

    You could literally wait until the end of the year- and jump in with little to no loss of profit in the meantime. So if you want to buy the stock cheap and sit on it- yes, the author is right- AXP is a good buy.

    Or, you could buy V shares right now - in the 73 range- and actually make money on your investment- It is entirely up to you.     Reply
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