Talking Numbers

Never mind emerging markets turmoil now, here's one way to play their future growth

One way to play EM's future growth

MasterCard may have disappointed Wall Street with its quarterly earnings but two strategists say the stock is a buy at its current levels.

According to MasterCard's earnings data released Friday, the company's revenues grew 12% in the fourth-quarter of 2013 to $2.14 billion from the $1.9 billion in 2012. Its bottom line of $623 million was 3% higher than last year. However, that was a letdown for Wall Street; while adjusted earnings were $0.57 per share, $0.60 was the expected number.

Traders took share prices down to as low as $73.20 on Friday morning from the previous close of $79.76. However, the stock recovered a bit and closed Friday at $75.68.

JC O'Hara, Chief Market Technician at FBN Securities, believes MasterCard's stock has retained an uptrend since its 2009 lows, though he thinks the slope of that uptrend was almost unsustainable when fourth-quarter 2013 earnings were released Friday morning.

"I think analysts got a little too ahead of themselves in what they were looking for," says O'Hara to CNBC's Street Signs' Talking Numbers segment. "So, you saw that pullback today."

However, O'Hara is optimistic because the stock held its $71 support level after the earnings release.

"Buyers came in, showing there was huge demand for this stock," says O'Hara. "If you want to get in it right here, I think you do have upside to $85, which was former highs. And, I would set your risk right around to today's low. I think you have a great trade ahead of you."

Marc Lichtenfeld, Chief Income Strategist, also believes MasterCard is a buy.

"There are some things money can't buy but, fortunately, MasterCard's stock isn't one of them," say Lichtenfeld. "The company is still in strong growth mode. They had 15% profit growth in 2013 [and] 40% cash flow from operations growth, which is pretty substantial."

Lichtenfeld also likes MasterCard's global growth and thinks the stock is a buy.

"They grew their business by 15% in Europe and 15% in the emerging markets," says Lichtenfeld. "I know emerging markets are kind of a taboo phrase these days but as that emerging middle class develops and the global economy recovers, there are going to be a lot of people who are going to want iPhones, tablets, and flat screens and they're going to want to pay for it with credit cards. MasterCard has shown that it can penetrate those markets."

To see the rest of the discussion on MasterCard with O'Hara on the technicals and Lichtenfeld on the fundamentals, watch the video above.

More from Talking Numbers:

Could this company be the next Nike?
Suddenly, Twitter is cheap
Forget earnings, this chart shows why Facebook's a keeper


Follow us on Twitter: @CNBCNumbers
Like us on Facebook: