Credit card holdings may have bottomed out this week

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The MasterCard logo on a smartphone in St Thomas, Virgin Islands.

Gabi Jones | Bloomberg | Getty Images

(This article was first sent to members of the CNBC Investment Club with Jim Cramer. To get real-time updates in your inbox, Subscribe here.)

The Investing Club team is currently preparing our Friday afternoon newsletter, in which we summarize the past trading week and introduce the most important market volatility events next week.

But before the end of today’s trading session, we want to return to the holdings of the charitable trust, which held a bullish investment community event, which may have laid the foundation for the stock. We are talking about MasterCard.

As we mentioned a few days ago, the management used this event to highlight their strategic focus on payments, and how they plan to drive consumer purchase growth, capture new payment flows, and create opportunities through new technologies and changing payment preferences .

The long-term shift to electronic payments

One thing to remember about Mastercard is that the stock is a manifestation of the long-term shift from cash to card and electronic payments. Mastercard estimates that the consumer-to-business payment market is a 45 trillion dollar opportunity, of which 20 trillion is swiped. As there are still about US$25 trillion in consumer spending that has not yet been resolved, we believe there is still a lot of room for growth in MasterCard’s business.

In addition, we thank their guidance for providing long-term visibility management. Between 2022 and 2024, MasterCard expects that an annual operating profit margin of at least 50% will be at least 50%, and the compound annual growth rate of earnings per share will be under 20.

The outlook for Mastercard is better than generally expected, which means that earnings forecasts have been revised upwards to reflect higher-than-expected new growth rates.

Bottom line

Pay close attention to MasterCard as a stock whose stock price has rebounded and surpassed its all-time high.

The CNBC Investment Club is now the official location of my charitable trust. Here, you can see every move we do for the portfolio and gain my market insight before anyone else. The Charitable Trust and my work are no longer affiliated with Action Alerts Plus in any way.

As a subscriber to the CNBC Investment Club with Jim Cramer, you will receive transaction reminders before Jim makes a transaction. Normally, Jim waits 45 minutes after sending a transaction alert before buying or selling the stocks in his charitable trust portfolio. If the trade alert is sent before the market opens, Jim will wait 5 minutes after the market opens before executing the trade. If the trading alarm is issued for less than 45 minutes during the trading day, Jim will execute the trade 5 minutes before the market closes. If Jim talked about a stock on CNBC TV, he would wait 72 hours after issuing a trade alert before executing the trade. Please see here for the investment disclaimer.

(Jim Kramer’s charitable trust is a long-term MA.)


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