You're right about MasterCard, but you keep leaving out another area that MA is making money. Debit Cards, more people use their debit cards over credit cards and cash.
MasterCard which will report earnings before the market opens on Wednesday, Aug. 1. While shares of the credit-card company are 100 points higher over last year, the shorts have been trying to link the stock with all of the recent credit and subprime issues. We believe the earnings numbers are going to be red hot, forcing the large position of shorts to cover.
A few things to note:
1) MasterCard makes a very small amount of money on each credit-card transaction that takes place.
2) It looks like the $13 million investment MasterCard made in Redecard, a Brazilian company that is coming public, is now worth more than $300 million once Redecard comes public in Brazil. This number has not been reflected in analysts' earnings models.
3) MasterCard is also a good play on the weak dollar. Keep in mind that there is a short position of 11% in this stock.
-- Jacob in South Carolina
Wow, it looks like you've done your homework, Jacob! I'm sure Guy will be very impressed. Readers, if you'd like to see more, check out the July 30th "Word On The Street" post. The Mastercard content is toward the bottom.
-- Lee Brodie
> Word On The Street (July 30th)
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