This payment giant is in the headlines – and for a good reason.
MasterCard (MA) just closed a massive deal.
MasterCard is one of the largest financial services companies in the world.
And they just got bigger.
MA recently announced that it was buying fintech firm Finicity for $825 million.
Finicity is a data aggregator that helps companies make faster consumer financial decisions.
They focus on things like credit decisions, financial transaction data, and account verification.
MasterCard has been going through a significant shift in the last few years, focusing on technology that offers assistance with making faster and better decisions.
Now, an $825 million deal isn’t a massive deal when it comes to a company the size of MasterCard.
But that’s not what’s important.
The message is.
Where’s the money?
Like I said above, the price sticker on this deal isn’t what caught my attention.
But the meaning behind this deal is priceless.
You see, this deal is a significant indication of the direction that MA is pushing towards.
And truthfully, I like the trajectory the company is one right now.
I also like the performance the stock has given over 2020.
Mastercard is posting some rare numbers…
It’s one of the top 29% of the S&P 500 that are up since the beginning of 2020.
And when you look back at previous investing environments plagued by a crisis like we’re seeing now, stocks with positive six-month relative strength saw a 78.4% chance of delivering a nice return in the months to come.
So, needless to say, MA has caught my eye…
How can I get some?
What MA is offering is something we haven’t seen much of this year: stability
So, I’m looking at getting a piece of this company as it continues to move in a direction that I think will be received well by investors in the future.
And you’ve got two options when it comes to this booming stock.
Buy call options.
With call options, as you know, your profits will come faster – but I would encourage you to shoot for calls with expiration dates far enough out to control your risk.
As far as buying stock, this is one name I feel will continue to move to the upside, so putting your money into the stock could pay off.
And the best part? With either option, you most likely can’t lose.
Because with the numbers MA has been posting, this opportunity is a strong contender, and I’m seeing an excellent size return in the future.
Speaking of stability…
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In the Spotlight: This 85-year old vitamin company
GNC, the well-known vitamin and supplement company, has officially filed for bankruptcy.
The company was carrying over $1 billion worth of debt and was struggling with declining sales even before the pandemic hit.
And while the company hoped to refinance, with the national shutdown weighing on the economy, it wasn’t possible to fulfill what they had expected.
GNC will continue operating, but it will be downsizing significantly with the bankruptcy.
The current plan is to close up to 20% of its 5,800 retail stores, which will mean up to 1,200 locations across the United States could see their lights go out.
The hope is that by filing bankruptcy, it will give the company an “opportunity to improve our balance sheet while continuing to advance our business strategy, right-size our corporate store portfolio, and strengthen our brands to protect the long-term sustainability of our company.”
And they will have a little assistance too.
The company obtained $130 million in financing from its largest vendor, vitamin supplier IVC, to help support this restructure, and GNC is aiming to emerge from the bankruptcy by fall.
But with all that said, this is not a name I will be adding to my portfolio.
Because as we’ve talked about before, you don’t dump money into a sinking ship – even if they don’t expect to go all the way underwater.