Many investors prefer waiting for marketwide dips before jumping into new positions, and rightfully so. Stocks continually ebb and flow, but the good ones always recover from setbacks en route to higher highs. It’s just a matter of when.

If you’re waiting on another pullback to jump into payment facilitator Mastercard ( NYSE:MA ), however, don’t. This stock’s price has already fallen nearly 17% from its late-July peak, but not for a particularly logical reason. It’s a bargain right now, and a market crash might not shave enough off its present price to justify waiting any longer. Image source: Getty Images. Down, but not out

Don’t read too much into the message. Marketwide weakness could drag shares of Mastercard a little lower, or even a lot lower. Anything’s possible.

By that same token, though, a sweeping crash might not be in the cards for a long, long time. Holding off on a purchase could prevent you from plugging into a rebound from Mastercard that is set to materialize sooner rather than later. It certainly has the right growth prospects to support such a recovery.

Mastercard facilitates nearly a third of the world’s credit card payments, according to research outfit MoffettNathanson. That’s only half of rival Visa ‘s ( NYSE:V ) share of the traditional card payment market, but a third of a market worth hundreds of billions of dollars per year is still plenty of opportunity. The company’s also exposed to the debit card arena, ATMs, merchant analytics, and even cryptocurrencies.

All of this demand and revenue diversity didn’t mean much a week ago. The company topped its third-quarter estimates of $4.95 billion in revenue and $2.19 in earnings per share (EPS) by reporting sales of $5 billion and $2.37 in EPS. But share prices still slumped 6%. The stock price has even fallen another 3% in the meantime, as investors saw tepid earnings guidance not from Mastercard, but from Visa. All told, Mastercard stock now sits 17% below its July high, slipping back below its pre-pandemic peak just this week.

It just doesn’t make sense.

Sure, the future is anything but clear for credit card companies. This year’s spending rebound is firm as the COVID-19 contagion abates and consumers ease back to normal. This year’s spending growth pace could be tough to sustain, though. The next era of payment processing is also one that prominently features younger alternatives like PayPal ( NASDAQ:PYPL ) and Square ( NYSE:SQ ).

The share selling that’s materialized over the past several weeks, however, arguably ignores the net potential of all the growth initiatives Mastercard is working on. Adapting as needed

Case in point: The aforementioned cryptocurrency solution for one. In February, the company announced that select cryptocurrencies would become viable payment and settlement options within its network before the end of the year. It’s been moving forward on the crypto front in the meantime, acquiring CipherTrace in September, and unveiling a partnership with Bakkt ( NYSE:BKKT ) in October. CipherTrace brings new crypto security features in-house, while Bakkt helps merchants offer crypto payment options to their customers.

And that’s just one example of Mastercard’s adaptation to capitalize on ongoing changes to the marketplace. In October, the company expanded its business-to-business payment platform that offers more capital to companies looking to streamline the payment aspect of their supply chain. Earlier this year, the credit card company and Verizon announced they’re teaming up to offer 5G solutions to the global payments industry.

These are the sorts of developments most investors dismiss, and understandably so. None of them are outright game-changers in and of themselves. In the aggregate, though, all these small initiatives set the stage for firm sales and profit growth through 2023. Analysts certainly think so anyway. Data source: Thomson Reuters. Chart by author. Granted, investors don’t seem to see it right now. This long-term growth outlook has been and continues to be obscured by a bunch of noise, from and about the company. Adding to this distraction are the continued evolutions of nontraditional payment options, and more pressing headlines from the political and economic realms.

This noise, however, doesn’t actually change Mastercard’s fiscal trajectory. Just be patient

Waiting for the broad market to crash might help lower your entry price on Mastercard … a little. But this is a pick where waiting for a sweeping correction that may or may not materialize actually imposes more risk of missing out on the potential gains. Shares are already priced more than 30% less than the consensus analyst price target of about $432 per share. […]

source Don’t Wait for a Market Crash to Buy This Growth Stock

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