American Express (AXP)

Thinks we are in the late stages in the market, and he is not sure that you want to own any large caps trading at 14X earnings with a pretty small dividend yield. He would be very cautious on this. These things can go down a lot in a correction. Yield of 1.25% and he would stick with the companies that have a better dividend.

This is not growing at the same massive rate that you are seeing with Visa (V-N) and MasterCard (MA-N). The issue is that they want to keep their service level very high and they want to cater to the elite high end customer, so they really have to walk a fine balance between cutting costs. Their mobile initiatives are excellent. They are also doing Optblue, going after the small merchants, which could be very large. Valuation is pretty attractive versus its 2 rivals. Owning all 3 would not be a bad play either.

There is multiple compression coming into their space. No one knows how this shakes out. Step aside and wait for the dust to settle. The other two are fine to invest in.

This company is doing some good things. Last report was very constructive and very good. He prefers Visa (V-N), which doesn't have credit risks and is just a transactional type of business.

MasterCard or American Express for a long-term hold? This has this great brand name. Their clientele is much more affluent. The problem with it is that not every place takes it. Trades at a much lower multiple. If he was pushed, he would say that MasterCard is probably the better.

(A Top Pick May 1/13. Up 28.06%.) Raised their dividend and 4.4 billion common shares are going to be bought back in the next 12 months. Still a core holding. This correction is a great buying opportunity.

Visa (V-N) or American Express (AXP-N)? At present she does not hold a credit card company, but it is a group that she is looking at because they have all pulled back close to their 50 day moving average. Visa and MasterCard trade at a much higher multiple (25X forward earnings) but growth rates are arguably stronger than American Express. Between this and Visa she would probably prefer Visa because it is a larger, more dominant player.

(A Top Pick May 1/13. Up 33.01%.) They are making a big effort into the smaller merchant business space where 70% of that business is basically Visa (V-N) and MasterCard (MC-N). Hopes to own this one for a very long time.

(A Top Pick May 1/13. Up 26.6%.) Getting a little bit difficult to hold for him. At the end of the day he thinks that MasterCard (MC-N), Visa (V-N) and Discover (DFS-N) are a little bit more interesting. There is no evident reason to Sell at this point. Extremely well managed and they don’t often disappoint.

Visa (V-N) and MasterCard (MC-N) really do the network and don’t have any exposure to the credit side of things, or whether people pay or default on their bills, whereas this company does. Because of this, you are able to buy this on lower multiples, which is attractive. A great franchise. High ROE’s over time. Valuation at this time keeps her on the sidelines.

She doesn’t hold charge card companies. This one has a phenomenal franchise. Recent results were great. The valuation is the problem with owning it. 17 times earnings is slightly above the historical range. Good momentum on the business side and maybe it gets things going.

This is a good company that is doing good things, but it is fully valued. Earnings and revenue growth haven’t kept up with the price appreciation. If you own, it should be sold because it is really fully valued.

Sold his stock at $65 because he thought it was fully valued. This is a fundamentally different company than Visa (V-N) or MasterCard (MC-N). They actually issue credit cards so therefore they take on credit and default risks and bear the burden of this themselves. If there is softness in the economy, which it looks like we are going to have, you will see defaults go up and you’ll see credit risks going into this company. He would be inclined to own something like Visa or MasterCard.

As retail sales improve, the credit card companies will go up. However, they have already been bid up a lot, so thinks they are fully priced now.

Have a lot of the credit concerns behind them. Theoretically they are dealing in the wealthier segment of the market. In the last 4 years, the have spent any excess capital into their technology. Thinks they are going to make some really big strides in mobile payments, digital processing and that whole area. Yield of 1.34%.