The Week That Was: Mastercard, Walgreen’s, Barnes & Noble and Microsoft
Tim is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
As if there wasn’t enough information for investors to mull over from last week, today’s results from the European elections have gotten the week off to a tenuous beginning. Apparently investors are blaming it on the French (yeah, what’d you expect?) and their new Socialist leader, with a rousing boo and hiss directed Greece’s way too. Nothing new there either so it shouln't take the market long to rebound from the nasty start.
Which brings us to more pressing issues – the results of last week’s earnings and related investment news, and the impact of all that for investors going forward.
All Mastercard (NYSE: MA) – and shortly thereafter, Visa (NYSE: V) – did last week was reinforce what many have expected for months now – continued strength in all things spending. As impressive as earnings and revenue numbers were for the two reigning credit card leaders, Mastercard’s growth in card usage both domestically and overseas should have had investor’s shouting with glee. With a jump of 14% here at home and a whopping 20%+ across the pond – on top of the aforementioned earnings numbers – you’d think Mastercard would have jumped, at least a little. Not so much. Even with the days slight rise the share price is down about 3% since the announcement – and Visa has followed suit.
What’s an investor to do? As strong as Mastercard and Visa are, the best value in the sector remains Discover Financial Services (NYSE: DFS). As the article from last week points out there remains some work to be done, but with so many positives working in the industry’s favor Discover is a solid bet to ride the rising wave.
CVS Caremark (NYSE: CVS) got the Walgreen discussion up and running last week after posting ridiculously strong results. That in and of itself wasn’t the impetus for the article on Walgreen’s – it was more about what drove CVS’s numbers. According to CVS Caremark CEO Larry Merlo at least part of the positive quarter was the continued movement of former Walgreen’s customers over to the $58 billion industry bellwether.
And just as frustrating for investors was the response from readers. As with the first article in late December, the changes of working conditions and even more importantly mindset of Walgreen’s employees speaks volumes. What was once a workforce that by and large viewed their employment as a long-term career opportunity, is quikly becoming more and more disenchanted. CEO Greg Wasson has enough on his plate trying to turn Walgreen’s (NYSE: WAG) around without losing the loyalty of his workforce. If reader’s responses are any indication, it may already be too late.
Microsoft and Barnes & Noble
What a way to kick off the week for Barnes & Noble (NYSE: BKS) shareholders. The partnership announced on Monday with Microsoft (NASDAQ: MSFT) was viewed positively to say the least – well, for Barnes & Noble anyway. Investors and shareholders have screamed at Barnes & Noble management forever to unlock the value of the company’s most valuable asset – the Nook. The development of a new subsidiary – in partnership with Microsoft – is expected to do just that.
But lost in all the Barnes & Noble reverie was Microsoft and what this (continues) to say about the company. This was yet another example of Ballmer and the boys aggressively – and wisely – continuing their efforts to expand their many revenue streams. As their fingers are dipped into more and more pies, investors seem more apt to ignore what’s going on up in Redmond. That’s a shame, at least for existing shareholders. For investors Microsoft remains one of the best values in any industry.
The investment opinions included are just that, opinions. Investing involves risk, as you well know, so consider your decisions wisely. Tim holds no position in the securities mentioned in this article. The Motley Fool owns shares of Microsoft. Motley Fool newsletter services recommend Microsoft and Visa. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. If you have questions about this post or the Fool’s blog network, click here for information.