Mastercard (MA), and Visa (V) are growth stocks mutual fund managers are currently buying. After carefully reviewing the security's strengths and weaknesses, these institutions will purchase shares.
Visa is third and Mastercard fifth respectively in the Finance-Payments and Credit Cards category. This group ranks 47th out of 197 industry groups in IBD, placing it in the top quarter.
Both growth stocks are also held in exchange traded funds, such as the iShares US Financial Services (IYG), and Financial Select Sector SPDR (XLF).
While earnings and sales are important, so is price performance compared to the S&P 500. Institutional investors are represented by the 'I' in CAN SLIM' stock-picking system. The IBD Stocks Funds Are Looking to Buy Screen displays growth stocks that are of strong interest to mutual fund managers.
These fintech payment powerhouses are not surprising in light of the current banking crisis.
The global duopoly of electronic payments has settlements programs and partnerships. Federal Deposit Insurance Corporation (FDIC) took over SVB in the beginning of this month, and sold most assets to Flagstar Bank, a New York Community Bank subsidiary.
SVB offers Mastercard business credit cards. Signature Bank also offers a Mastercard debit facility. Visa has entered into a partnership agreement with the troubled First Republic Bank (FRC). According to reports, however, digital payments through these banks have continued to work smoothly despite the bank failures.
Visa is nearing a buy point of 231.50. MarketSmith data shows that more funds have bought the stock over the past five quarters.
Stock has yet to recover its 50-day moving mean, which was broken earlier in the month. It boasts a Composite Rating of 94, and a higher-than-average 85 Relative Strength rating.
The unbroken record of earnings and sales growth over seven quarters has earned it a top-notch rating of 92 EPS. The fourth quarter saw Visa sales grow by 12% to $7.9billion, while earnings grew 20% to $2.18 per shares. 51% of Visa shares are held by mutual funds.
VisaNet, a payments network that is based in San Francisco, is a leader for global payments. VisaNet offers branded credit, debit, and prepaid cards to individuals and businesses through 200 financial partners and clients.
Mastercard, a blue-chip competitor, has been attracting strong mutual fund interest and ETF interest since eight quarters.
MA stock has a Composite Rating of 93 and an 81 Relative Strength Rating. The strong track record of earnings growth and sales is evident in MA stock's 88 EPS Rating.
Sales grew by 12% to $5.8billion in the fourth quarter while earnings rose 13% to $2.65 per shares year-over-year. The stock is owned by 44% mutual funds, and has a base of 384.21, which means it is still a relatively flat stock.
Electronic payments giant Cirrus offers three brands: Mastercard Maestro, Cirrus and Maestro. Payments are integrated into the company's proprietary payments network, which also includes automatic clearinghouse features.