A Short-Term Bet on a Cashless World

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

The weak start to 2015 continued last week, with the Dow Jones falling 1.27%, the S&P 500 dropping 1.24% and the NASDAQ tumbling 1.48%. The MCSI Emerging Markets Index eked out a 0.56% gain.

The big gainers in your Bull Market Alert portfolio included the ProShares Ultra Nasdaq Biotechnology ETF (BIB), up 2.76%, and WisdomTree Japan Hedged Equity ETF (DXJ), which added 1.08%. Two positions — the ProShares Ultra Nasdaq Biotechnology ETF (BIB) and Halyard Health Inc. (HYH) — hit new 52-week highs.

You were stopped out of cybersecurity play LifeLock, Inc. (LOCK) at a loss. Recall, though, you had scored a triple-digit percentage gain in LifeLock options back in December. Your January $17 call options in Bank of Ireland (IRE) expired worthless.

This week’s Bull Market Alert recommendation revisits MasterCard (MA), a recommendation I have made in the past.

Here’s why I expect MasterCard to fare well in the coming weeks.

First, both MasterCard’s price performance and fundamentals remain strong. The company grew earnings per share by 19.7% in the most recent quarter, compared to the same quarter a year ago. This year, the market expects earnings to grow from $2.57 to $3.08. That’s another 19.8% gain. MasterCard’s gross profit margin stands at a high of 60.05%, increasing substantially from the same quarter the previous year. Its net profit margin of 40.55% also significantly outperformed against the industry average.

Second, MasterCard stock is technically oversold, according to my favorite technical indicators, and due for a bounce. It also just bounced off of the bottom end of a trading range that has stretched back to November.

Finally, Deutsche Bank just raised its price target on MasterCard from $91 to $105, citing accelerating revenue growth in the second half of 2015. With MasterCard closing at $83.80 on Friday, that represents an upside of 25.3%.

Exclusive  A Stock Market Anniversary Lesson… Don’t Be a Loser

With 85% of all the world’s transactions still made by cash, there is plenty of growth ahead for companies like MasterCard.

So buy MasterCard (MA) as soon as the market opens tomorrow (due to today’s holiday) and place your stop at $75.50. If you want to play the options, I recommend the April $85 calls (MA150417C00085000), which last traded at $3.59 and expire April 17.

Portfolio Update

The Bank of Ireland (IRE) closed flat last week. IRE has been in a sustained pullback from its significant $17.25 resistance level since early December 2014. Fast forward to today, and IRE now rests on its even stronger $14.00 price level — and appears to be consolidating. This is good news, as IRE has rallied higher from this level each time it has touched it since mid-October of 2013. IRE is below the 50-day moving average (MA) and remains a HOLD.

PowerShares DB Commodity Tracking ETF (DBC) fell 1.02% last week, hitting a new 52-week low. This represents yet another winning week for this short bet on commodities — a position that has not posted a losing week in your portfolio to date. Although the downward spiral in oil prices has been a high-profile driver behind this position’s winning streak, the decline in copper made the news last week. Copper plunged on weak global demand and oversupply concerns and now stands at a 5 ½-year low. DBC remains a SHORT SELL.

ProShares Ultra Nasdaq Biotechnology ETF (BIB) gained 2.76% last week. The biotech sector has taken a bit of a breather these past few weeks. However, biotech as a whole remains a strong buy and BIB made an excellent gain last week to hit a new 52-week high. BIB is a BUY.

Exclusive  Dow 13,000!

Palo Alto Networks, Inc. (PANW) dipped 0.64% last week. Dougherty & Co. reiterated its “Buy” rating on PANW recently, joining a growing group of analyst firms calling for a buy on this stock. Dougherty also raised its price target to $150 — a potential 20% gain from last Friday’s close. PANW is a BUY.

The Rubicon Project, Inc. (RUBI) fell 6.33% for in its first week in the Bull Market Alert portfolio. RUBI dipped closer to its 50-day MA last week as it took a bit of a tumble on Thursday. I’m expecting buying support at the 50-day MA on this position and will continue to hold my option recommendation for now. RUBI is a BUY.

Latest Special Report

As a courtesy, I want to bring to your attention the newest version of The Top 12 Stocks for 2015, which features three of my top investment recommendations, as well as bonus picks from each of my fellow investment newsletter editors at Eagle. This report and others are available FREE on my website to you.

NEW FEATURE — Receive your alerts via text! You now can receive a text message on your cell phone to inform you whenever a trading alert is sent. To add this free new benefit to your service, please send an email to CustomerService@NicholasVardy.com with the following information and mention in the email that you want your cell phone added to your account:

  • Your Name
  • Your Zip Code
  • Your Email Address
  • Your Cell Phone number

Please note that we can only deliver text messages to cell phones with U.S. or Canadian numbers. Standard text messaging rates from your provider apply.

Exclusive  Seeking High-Yield Income from the Business of Lending

Nicholas Vardy

Upcoming Appearance

Join me for the World MoneyShow in Orlando, Florida, Feb. 4-7 at the Gaylord Palm Resort & Convention Center. To register for free admission to the investment conference, click here or call 1-800-970-4355 and mention you are my subscriber. Use priority code 038045.

Like This Article?
Now Get Our FREE Special Report:
Alternative Investing: Investing in Timber

Stock Investor editor Paul Dykewicz reveals why investing in timber may be one of the best long-term portfolio strategies you'll find today.

Get Access to the Report, 100% FREE


img
previous article

The marketing campaign that claims “what happens in Vegas stays in Vegas” proved true in the case of O.J. Simpson, whose use of guns and accomplices at a casino hotel to help him retrieve collectibles he alleged were stolen from him not only put him in prison but damaged the value of those coveted items.

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

Mike Turner

Mike Turner’s financial, mathematical, computer science and engineering background serves as the foundation for his disciplined, rules-based approach to trading. Mike’s three services include:

Product Details

LEARN MORE HERE

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE