Tags: Cramer | Visa | MasterCard | payments

Jim Cramer: Wall Street Likes Visa, MasterCard; Maybe You Should Too

By    |   Tuesday, 16 September 2014 02:17 PM

Major brokerage firms are bullish on Visa and MasterCard, and that's a good sign for those stocks, says CNBC commentator Jim Cramer.

Sterne Agee began coverage of both companies Monday with a "buy" rating. AllianceBernstein gave MasterCard a "buy" and Visa an "outperform" rating. And Piper Jaffray rated both stocks an "overweight."

Cramer's take: "They have three different brokers come out in one day and recommend it with a lot of electronic payments news. That, I think, is positive," he notes.

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The "secular growth theme, which is [a shift from] paper to plastic" gives the companies momentum, Cramer argues.

While Apple introduced a mobile payments product of its own last week, it said it will partner with Visa and MasterCard on the system.

"All I'm really saying is that I'm trying to tell you where money goes if they feel like it should go and they don't like the financials because the yield curve is not right and they're worried about tech. This is a tech financial and people like that," he adds.

"I'm just trying to show the alternatives the way the big money managers think."

Morningstar analyst Jim Sinegal puts Visa's fair value at $223. It closed at $215.53 Wednesday, down $1.77, or 0.8 percent.

"Visa dominates the global market for electronic payments, accounting for about half of all credit card transactions and roughly three-fourths of debit card transactions in recent years, according to the Nilson Report," he writes on Morningstar.com. "In a world in which the number of digital payment transactions is constantly growing, this wide moat company should flourish."

Sinegal estimates MasterCard's fair value at $82. It ended at $76.22 Wednesday, down 37 cents, or 0.5 percent.

"At present, we estimate that about 85 percent of global transactions are still made with cash," he writes. "We expect that MasterCard will eventually process a much larger share of these transactions, resulting in healthy top-line growth for years to come."

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Major brokerage firms are bullish on Visa and MasterCard, and that's a good sign for those stocks, says CNBC commentator Jim Cramer.
Cramer, Visa, MasterCard, payments
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2014-17-16
Tuesday, 16 September 2014 02:17 PM
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