Credit Card Stocks Charge Forward (V, MA, AXP)
It’s easy to overlook certain sectors and industries that have remained resilient and continue to surge despite the recent market turbulence. Companies leading the credit/debit/charge card industry form one corner of the market that has performed strongly for years. And these credit card stocks seem to weather market downturns relatively well.
On a related note, Thursday saw U.S. consumer spending rise by 0.6% in October, significantly greater than the 0.4% expected. Clearly, higher spending by consumers is just one factor in boosting these types of stocks over time.
Chief among these strong companies are the ubiquitous Visa (V), Mastercard (MA), and American Express (AXP) brands – all S&P 100 companies. The latter just hit a new record high above $113 on Wednesday. Though American Express has risen a comparatively modest 11% year to date, its gain from the February 2016 bottom is more along the lines of 120%.
As for Visa and Mastercard, their stock moves understandably mirror each other, as their services and offerings share many similarities. Both companies hit recent all-time highs on the same day – October 1st. But MA is up nearly 30% year to date while V is up a more modest 21%. Both have gained well over 100% within the past three years.
So what’s the takeaway from all of this? If you’re not already invested in this industry, it’s obviously too late to take part in its exceptional past returns. But if you’re looking for potentially strong performers over the long-term, these financial services companies might be worth some serious consideration.
IMPORTANT: The information above should not be construed as investment advice and should not be considered as a solicitation to buy or sell securities. Past performance is not indicative of future results. Trading and investing in the financial markets involves substantial risk of loss, and may not be suitable for all investors.
Disclosure: At the time of this article’s publication, we have no position in any security or trade/investment mentioned, nor do we have any business relationship with any company whose stock may be mentioned.
Senior Technical Analyst at The Technicals
As a momentum stock trader, Luke focuses mostly on strong market moves. Luke has been trading the markets since the early 2000s, but still gets excited by big movers. Whether a surging large-cap tech company or meteoric penny stock, Luke tracks and trades winners. A technical analysis purist, Luke authors many of our Top Stocks & ETFs reports. Contact Luke