This week’s Alpha Algorithm has identified a new recommendation in the booming payment space.
MasterCard Inc. (MA) develops and markets payment solutions. It also provides industry-leading analysis and consulting services to financial institution customers and merchants. MasterCard’s family of brands includes MasterCard, Maestro and Cirrus.
MasterCard, Inc. (MA) vs. the S&P 500 year to date
11 Top Investment Strategies Betting on MasterCard (MA)
1. High-Quality Stock
It is a U.S. stock that exhibits positive fundamentals, including high return on equity, stable year-over-year earnings growth and low financial leverage.
2. Momentum Model
The stock is among the top approximately 100 U.S.-listed companies to demonstrate powerful strength characteristics relative to the 3,000 largest U.S.-listed companies.
3. Large-Cap Momentum
The stock is part of a major hedge fund’s systematic strategy that invests in large- and mid-cap U.S. companies with positive momentum and that rank in the top third of total return over the prior 12 months, excluding the last month.
4. Large-Cap Growth
The stock is among the top 50 large-capitalization U.S. growth stocks generated through a rigorous 10-factor fundamental screening process.
5. Capital Strength
The stock is part of a strategy that seeks to outperform the market by selecting companies based on the strength of their balance sheets, long-term debt ratios and return on assets (ROA).
6. Small-Cap/Value Tilt
Selected using a multi-factor modeling approach, the stock is a smaller-cap or value stock designed to enhance portfolio risk/return characteristics.
7. Large-Cap Alpha Growth
The company has been chosen as part of an alpha-seeking index that selects and weights growth stocks from the S&P 500 Growth Index. The proprietary methodology uses price appreciation — among more traditional factors — and weights the constituents based on their respective growth scores.
8. Goldman Sachs’ Active Beta
The stock is selected according to four factors — value, quality, momentum and low volatility. These, in turn, are based on criteria that include book value, sales, and cash flow scaled by share price, profit/assets or return on equity (ROE), risk-adjusted returns and daily standard deviation of returns.
9. IBD Top Fifty
The company is a Top 50 stock based on Investor’s Business Daily’s proprietary trading formula to identify 50 stocks that meet one of seven different catalysts. The “CAN SLIM” strategy identifies companies with either fundamental (improving earnings or new product) or technical (upward stock move on strong volume) catalysts.
10. Value Line 100
It is one of the top 100 stocks in the universe of 1,700 stocks for which Value Line gives a #1 ranking in the Value Line Timeliness Ranking System, based on expected price performance over the following six to 12 months.
11. Low Interest-Rate Sensitivity
This is a large-cap U.S. stock selected for its low volatility and positive price performance in a rising-interest-rate environment.
Recommendation
Buy MasterCard Inc. (MA) at market today and set your stop at $137.50.
If you want to play the options, I recommend the MA January 2018 $145.00 calls (MA180119C00145000), which last traded at $6.15 and expire on Jan. 19.
Portfolio Update
You were stopped out of Lam Research Corporation (LRCX) at $196.50 for a 15% gain on Oct. 19.
You were stopped out of Applied Materials, Inc. (AMAT) at $54.65 for a 15% gain on Oct. 19.
You were stopped out of NVIDIA Corporation (NVDA) at $191.50 for a 15% gain.
You were stopped out of AT&T (T) at $34 for a 15% loss.
Sincerely,
Nicholas A. Vardy
