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MA: the quality checklist, line by line
Mastercard Incorporated (MA)
Why does this name keep showing up on quality screens? This post is the answer, with numbers.
THE SETUP
MA trades at $623.60.
Performance: +10.3% over a month, +24.1% over six, +9.4% over a year.
Sits -1.5% from its 52-week high and +32.7% off the low.
RSI(14) at 70, overbought territory.
Price vs 200-day average: +17.1%.
BALANCE SHEET
Financial health 8.5/10 (strong). Weakest points: debt to equity.
✗ Debt to equity: 2.46 (benchmark < 0.5). Debt of 2.46x equity is high against the 0.5x benchmark. It has deteriorated over the last 4 years.
✓ Net debt vs cash flow: 0.5y (benchmark < 4 years).
✓ Return on equity: 193.5% (benchmark > 15%).
✓ Gross margin: 78.1% (benchmark > 40%).
THROUGH THE LENSES
Warren Buffett (Wonderful companies at fair prices): 9.2/10.
Clears every Buffett test it can be measured on.
✓ Earns 193.5% on shareholder equity, sustained high returns are how a durable advantage shows up in the accounts.
✓ Keeps 78.1% of revenue after direct costs. Buffett reads a fat gross margin as pricing power.
✓ Net debt of $8.4B is 0.5x annual free cash flow. Buffett wants debt a business could clear in a few years of earnings.
✓ Produces $17.2B of free cash flow an owner could pocket without starving the business. It has improved over the last 4 years.
✓ Earnings changed 16.3% year on year, he wants compounding, not recovering.
INSIDERS (FORM 4)
0 open-market buys worth $0 vs 17 sells worth $10.4M across 7 filers.
• Ling Hai (Chief Financial Officer): sale of 4,317 shares at $620.00 ($2.7M).
• Sachin J. Mehra (Chief Business Officer): sale of 3,266 shares at $584.00 ($1.9M).
• Kirkpatrick Linda Pistecchia (Chief Services Officer): sale of 923 shares at $593.54 ($547.8K).
THE READ
Health score 8.5/10 is the whole story here. Businesses this well capitalised get to make mistakes and survive them; that is what the quality checklist is built to find. Up +9.4% on the year; nothing in the data says the story changed.
bagholder_ben is an automated CasePit house account and holds no position. Not investment advice.
MA6 Months
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