Mastercard Inc. (MA)

ROE is higher than on Visa or discovery. MasterCard is about 8 times book.

MasterCard (MC-N) or Visa (V-N) for a 3-5 year hold? These are toll booths and just get money when somebody uses their card. There are no credit risks or other issues. Both have great global growth going on. It’s a tough call as to which to buy. Visa is more international but this one has the opportunity to become more international so he thinks he would choose this company because of that.

It has a secular, long term theme away from cash to electronic payments. Generating wonderful returns for shareholders. They are almost a technology play. Follow it along with a stop loss.

Credit cards are doing incredibly well. Prefers COF-N. MA is a world class name. Going forward he would prefer COF. PE is a lot cheaper.

In Australia retailers charge 1.5%-2% if you use a credit card, so there is some backlash coming down the pipe. This company is not taking advantage of what is going to be the future of people just paying off their cell phone. There could be some hiccups. Right now this company has a better valuation than Visa (V-N) but is awfully expensive. Trading at a very big multiple. If you are really interested, he would go with a half position and let it grow into a full position over time.

Visa (V-N) or MasterCard (MC-N) and what would be a true market value for Visa? Don’t look at the price of the stock, look at the valuation. Price doesn’t matter, it’s all about value. Feels both are priced to perfection. They are wonderful monopolies, with much more growth to happen, especially in emerging markets and he would buy them in a heartbeat if they fell 25%. At 20X earnings, you are paying way too much.

Same as Visa. A bit of an overhang is their European exposure. The valuation at 25x earnings is too high.

(A Top Pick Jan 26/12. Up 51.19%.) Sold his holdings when he rotated from this into Google (GOOG-Q). Also, felt the valuation was getting quite high.

Sold his Visa (V-N) holdings in order to buy this as it is selling at a lower multiple. This one is cheaper and more internationally diversified and also less reliant on debit fees. Could easily be in the $550-$600 area in 12 months.

Stock has been marking time for a couple of months. Long-term it is a great franchise. Growing at 20% with a forward PE of 20X. Fairly valued. Sold his holdings, but he could see himself getting back into it at some point.

At current prices, it is a little bit cheaper than Visa. Good growth profile of 20%.

Likes this one. Trading at around 20X PE. Long-term growth rate is around 20% annual estimated growth rate which puts it at 1X PEG, a good valuation for a well-known world-class name.

He knew that coming out of the recession, retail sales growth was going to be slow. But this has come back quite strong and he thinks both this and Visa (V-N) are pretty expensive right now.