Discover Financial Services
If you are scratching your head at the title of this article, wondering for a second if I just like oxymoron's, I take that as a good sign because it means I won't be wasting the next few minutes of your time as you are reading this.This pick may seem a bit questionable at first glance; it is only the fourth largest bank-card operator in the United more »
The term "credit score" is tossed around like it's going out of style. Even with the plethora of knowledge available on improving this crucial statistic of financial well-being, many consumers fail to pay off their debt. According to Statistic Brain, which verifies reports through the Federal Reserve and TransUnion, 56% of consumers carried an unpaid balance in the past 12 months. This isn't good for some aspects of more »
All signs point to a full economic recovery, and that means big things for payment companies. The following three firms are among the most innovative in the market, and I see all as having great potential for growth. As credit card debt falls to 10-year lows (see chart below), these firms will continue to benefit from spenders' credit cards becoming unfrozen. While that will increase activity, it is these firms more »
In an effort to achieve the “American Dream,” college students are amassing student loan debt at an alarming rate. So, the student loan business is booming. And, the Fed’s Zero Interest Rate Policy (ZIRP) has brought life to the student loan asset backed securities (SLABS) market.
Since new legislation in 2010, the government has been lending directly to students. The government now oversees about 90% of all more »
MasterCard (NYSE: MA) is firing on all cylinders lately, the stock is trading at all-time highs after delivering a blowout earnings report for the last quarter. Valuation may be getting a little frothy but, make no mistake; this global payments powerhouse still has plenty of upside potential for years to come.
There are basically two kinds of card companies with very different business models, players like American Express more »
eBay's (NASDAQ: EBAY) second quarter results were overshadowed by the company's subdued outlook for earnings for the second half of the year. That's left investors largely overlooking the continued strength of the payments division.
One of the biggest success stories of the Internet boom is PayPal. It first started as a third-party service for the settlement of eBay auctions. The company acted as a middle man between more »
When times are good, banking and financial services stocks are great investments.
Two leading card companies just reported earnings and investors are impressed. Double-digit improvements in net income should keep these financial stocks headed higher.
Discovering bigger profits
Discover (NYSE: DFS) is a leading credit card company and closed-loop network operator. On Wednesday, it reported second-quarter earnings of $1.20 per share, beating a consensus estimate of $1.16, and more »
When I see a stock trading for nearly $600 a share, I have the same reaction many investors probably have. It’s frustrating that the company chooses to keep the share price so high, as smaller investors like myself would have trouble accumulating a decent number of shares. While I know intellectually this higher price is the same value as 10 shares worth $60 each, there something gratifying about owning more »
I hate it when $1 billion goes missing don’t you? Much to my surprise, in Visa’s (NYSE: V) most recent earnings, the company reported stellar growth by nearly every metric investors could ask for. Between strong growth, and a new multibillion-dollar stock repurchase program, the market reacted positively to the company’s earnings. However, the company’s outlook leaves a rather large question unanswered, and if I were more »
Consumer spending took a hit when the recession took hold in 2007-2008. Since then, however, consumer spending in the United States has been making a slow but steady recovery:
source: St Louis Fed
At the same time, the estimated usage of cash is expected to decline.
What does this mean? It means we - the consumer - are swiping our cards again, and more often as time goes on! I suppose you more »
The economic recovery in the United States and consistent growth in emerging economies like China have resulted in higher consumer spending across the globe. This has proved to be a blessing for industries like retail, housing and automobile.
Apart from these, one other industry that has benefited from greater consumer spending is the credit card business. One of the leading companies in global payments technology, Visa (NYSE: V) reported robust more »
MasterCard (NYSE: MA) is one of the leaders in payment solutions, providing services related to credit, debit, and other payment methods for about 22,000 financial institutions. Shareholders of the company have done very well lately, with shares up more than 11% in the past three months alone. In fact, since first going public in 2006 at $39.00, shares are up an astounding 1,440%! With the company set more »
Are you one of the many shoppers finding yourself using plastic more often?
In some of my recent articles, I've highlighted the financial sector as a beneficiary of rising interest rates with some mention of credit card companies. However, in this article, I would like to focus on the numerous tailwinds set to help some of the largest credit services including Visa (NYSE: V), Discover Financial Services (NYSE: DFSmore »)
eBay (NASDAQ: EBAY) fell by more than 6% after the company missed earnings estimates by a cent last week. The market usually overreacts to short-term news, especially on the negative side, and this seems to be the case with the online retail giant. In case you were waiting for a good entry point, this looks like the right time to press the buy button on eBay
The company more »
The markets can punish even the best of companies.
Last week eBay (NASDAQ: EBAY) reported earnings that missed on the top and bottom line. Net income came in at $822 million for the quarter, while revenue missed at just under $3.9 billion. Earlier this year, eBay laid out aggressive forecasts, seeking to enable some $300 billion in online commerce by 2015.
The auction and payment company noted that its more »
Ten years ago no one would have thought of Capital One (NYSE: COF) as a bank. It was a pure play on consumer credit with a focus on credit card lending. It had the backing of Wall Street, raising funds from the credit markets with debt issuances to make money available to its credit card customers.
Fast forward 10 years and Capital One is a diversified operation spanning everything from more »
Capital One's (NYSE: COF) famous slogan is "what's in your wallet?", but I'm less concerned with what's in your wallet and more concerned with what's in your portfolio. Let's check out how you should trade the three major credit card companies.
The mid-market player
Big news for Capital One of late is that the Fed will approve a $1 billion buyback if the credit more »
In May, billionaire Louis Bacon’s Moore Global filed its 13F form with the SEC for the first quarter of 2013.
We don’t recommend blindly following hedge funds’ picks, among other reasons because the information is often out of date by the time it is released to the public, but there are a few techniques investors can use to take advantage of the included information. For one, we have more »
Over the last couple of weeks, interest rates across the bond market have rising fairly drastically as a result of fears concerning tighter monetary policy. While at this time its not clear if the rise is justified, I have been looking for select companies that would benefit from rising rates. I've come across many financial names as you would imagine. In this article I would like to take look more »
Ken Heebner’s asset management firm Capital Growth Management is one of the hundreds of hedge funds and other notable investors we track in our database of quarterly 13F filings. We’ve found that 13Fs can be useful sources of investment information; the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year, and we think that other strategies are possible more »
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