Visa and Mastercard are growth stocks that mutual fund managers are buying right now. These institutions pick up shares after carefully analyzing a security's strong and weak points.
Visa stands third and Mastercard fifth in the Finance-Payments and Credit Cards group, which ranks 47th among IBD's 197 industry groups, putting it in the top quartile.
Exchange traded funds also hold both growth stocks, including iShares US Financial Services ETF and the Financial Select Sector SPDR ETF.
Sales and earnings matter, but so does price performance compared with the S&P 500. The 'I' in the CAN SLIM stock-picking method stands for institutional investors. The IBD Stocks Funds Are Buying Screen shows growth stocks that have strong interest from mutual fund managers.
It is surprising that these fintech payment powerhouses have popped up on the screen amid the ongoing banking crisis.
The global duopoly in electronic payments have settlements programs and partnerships with Silicon Valley Bank and Signature Bank. The Federal Deposit Insurance Corporation took over SVB earlier this month and sold most of Signature Bank's assets to New York Community Bank subsidiary, Flagstar Bank.
SVB offers business credit cards via Mastercard. Signature Bank has a debit facility through Mastercard as well. Visa has a partnership with troubled First Republic Bank. However, digital payments via these banks have gone on smoothly in spite of the bank runs, according to reports.
Growth Stocks Visa, Mastercard Work On Bases
Visa is in a consolidation that's approaching a buy point at 231.50. More funds have been buying the stock for the past five quarters, according to MarketSmith data.
The stock has yet to retake its 50-day moving average, which was broken earlier this month. It has an impressive Composite Rating of 94 and above-average 85 Relative Strength Rating.
Its unbroken record of sales and earnings growth for seven quarters have earned a top-notch 92 EPS Rating. In the fourth quarter, Visa sales grew 12% to $7.9 billion while earnings rose 20% year over year to $2.18 per share. Mutual funds own 51% of Visa shares.
San Francisco based Visa is a leader in global payments through its payments network, VisaNet. Its branded credit, debit and prepaid cards for individuals and businesses are available through financial partners and clients across 200 countries.
Blue-chip rival Mastercard has attracted strong mutual fund and ETF interest for eight quarters now.
MA stock has a 93 Composite Rating and 81 Relative Strength Rating. Its 88 EPS Rating also shows a strong record of sales and earnings growth.
In the fourth quarter, sales grew 12% to $5.8 billion while earnings rose 13% year over year to $2.65 per share. Mutual funds own 44% of the stock, which is grinding through a flat base with a buy point of 384.21.
The electronics payments giant offers three brands: Mastercard, Maestro and Cirrus. Its proprietary payments network and automatic clearing house features integrate payments.
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