This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.
Otherwise, enjoy the column!
Subscribe to the Monster Stock Market Commentary to get the Weekly Monster Market Commentary and join the 3,072 subscribers getting it for FREE!
Amazon or Alibaba? Plus Visa, MasterCard, PayPal and Alphabet
The earnings parade as we started to note earlier is pretty big this week, and there plenty of additional companies reporting like Alibaba, Visa, MasterCard, Alphabet, and PayPal. But there is so much more to these companies than just earnings. Let’s explore
Alibaba or Amazon?
Alibaba shares have soared by nearly 100 percent over the past 52-weeks, and the stock just continues to run higher. Alibaba is the Amazon.com that tries to make a profit. Analysts are looking for the company to earn $1.66, on revenue of $12.24 billion in its fiscal third quarter.
AMZN Revenue (TTM) data by YCharts
It is incredible when you compare Amazon and Alibaba because Amazon’s revenue is more than five times that of Alibaba, but Alibaba’s operating income is nearly three times more than Amazon’s. A surprising fact that seems so unbelievable. Look at the chart below; Amazon has had revenue of over $161 billion over the trail-twelve-months to Alibaba’s near $29 billion, but Alibaba has created operating income of almost $9.5 billion, vs. Amazon’s $3.23 billion.
If you had to choose from a fundamental standpoint, Alibaba is the better choice of the two companies.
Visa and MasterCard
Visa and MasterCard have risen by over 50 percent each over the past 52-weeks, and both are up over 10 percent since the start of 2018. The rise in both stock is likely on the heels of a strong holiday season.
Subscribe to the MCM Stock Market Commentary to get it weekly and join the 3,072 subscribers getting it for FREE!
Analysts are looking for Visa to report revenue of $4.891 billion and earnings of $0.98, while MasterCard is expected to report revenue of $3.254 billion and earnings $1.12. Both stock trade with PE multiples in the mid-20’s.
I remember a few years back, I was at some investor conference, and I was telling another investor/analyst about owning Visa and Mastercard, and him going off on a tangent and telling me about how expensive the stocks were.
I just looked at him and said I have five bucks in my pocket, and I have these, showing him my debit and credit cards. I told him you couldn’t value something that has never happen in the history of the world, as people move from cash to a cashless society.
I’d gladly pay in the mid-20’s for either of these companies, in fact, I have a few years back, and presently. It is just this simple, how much cash do you carry in your pocket, and how many transactions do you make online? Every time you swipe, tap, insert, or click that Visa or MasterCard guess who makes money? They just sit there and collect the toll, like when you go over the George Washington bridge after sitting in traffic for 2 hours on the cross Bronx express. It is really is that simple.
You can begin to think of PayPal the same way as well, and to think Elon Musk was part of the early days of that company too. Now analysts are looking for them to earn $0.52 on revenue of $3.634 billion when they report results.
Finally, we will touch on Alphabet, but there is not much here to talk about. Analysts are looking for Alphabet to earn $9.98 on revenue of $31.86 billion. Alphabet is the dominant force in search and online advertising.
Have you thought about how many times a day your daily interactions touch an Alphabet product? I have, and it is amazing how engrained Alphabet is in my life. For Alphabet, it may just be that simple as well.
Mott Capital’s Reading The Markets – An In-depth Global Macro Stock Market Commentary – In Video Format – See How Michael Dissects The Markets
Just $200 Per Year – Get Your Free Trial
Dollar Breaking Down, Biotech And Intel Breakout
Why Apple May Not Be Toast Afterall
Why It May Be Time To Get Bullish On Materials As Dollar Plunges
What Everyone Seems To Get Wrong On Netflix
The Long Straddle, Plus Biotech Breakout
Inflation, Tesla Plus So Much More
Free Articles Written By Mike:
Intel’s Massive Breakout Could Fuel Stock’s 25% Rise
Starbucks Stock Price Reflects Perception, Not Reality
Why AMD’s Soaring Stock May See a Sharp Pullback
Why Netflix Is Still Cheap Despite 30% Gain In Three Weeks
Why Micron’s 2018 Stock Gains Won’t Last
Apple’s Stock Outlook Overwhelmingly Bullish, Options Indicate
How Netflix Will Spark The Next Media M&A Wave
Biotech M&A Spree Could Push Sector to New Record Highs
Why Apple’s Suppliers Are Plunging As Mega Tech Thrives
Why Chipmaker Lam Research Is Poised For a Rebound
How a Juno Takeover Could Boost Celgene
Why Ford Could Rise By Nearly 30%
Apple Poised to Gain 14%, Defying Skeptics
Exxon Mobil May Rise 20% on the Back of Surging Oil
We offer daily market commentaries sent directly to your inbox or follow us on Twitter.
Join our 3,072 Daily Subscribers And Get This Commentary In Your E-Mail! Subscribe
[vc_tweetmeme type=”follow” follow_user=”michaelmottcm” show_followers_count=”true” large_button=”true”]
Michael Kramer and the clients of Mott Capital own shares of V, MA, GOOGL
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.
© 2017 Mott Capital Management, LLC. Use, publication or reproduction in any media prohibited without the permission of the copyright holder.
Tags: #visa #mastercard #alphabet #amazon #alibaba