MasterCard and Visa to Open Near 52-Week Highs

MasterCard MA and Visa V reached new 52-week highs of $322.27 and $90.83 per share, respectively, in Thursday's trading session. MasterCard surged from $279 to $309 per share at the end of June, following the Federal Reserve's decision to place a higher-than-proposed cap on debit-card transaction fees. The Purchase, New York-based company operates the second-largest payment system on the U.S.: providing the transaction authorization network for its namesake cards and collecting fees from members. Its market cap is $39.5 billion. The dividend yield is 0.2% and the return on equity is 42.2%. The long-term EPS growth forecast is 19.5%. The P/E ratio is less than the industry average and the PEG ratio is 0.9. The stock has grown more than 42% since the beginning of the year, outperforming the business services industry average and American Express AXP, as well as the broader markets. Visa just reaffirmed its revenue guidance, signaling that the impact of the debit-card fee cap will occur in 2012 but that momentum would continue in 2013. The Foster City, California-based company has a $47.2 billion market cap and operates the world's largest consumer payment system, licenses the Visa name to member institutions, and offers debit cards, smart cards and traveler's checks. The company's P/E ratio is less than the industry average, and the long-term EPS growth forecast is 19.1%. It has a PEG ratio of 0.9 and a dividend yield of 0.6%. The share price has risen about 28% year to date. In that time, the stock also has outperformed the business services industry average and American Express, as well as the broader markets. Action Items: Bullish:Traders who feel optimistic about the financial sector might want to consider the following trades:

• SPDR Financial Sector ETF XLF
• Vanguard Financials ETF VFH
• iShares Dow Jones U.S. Financial Sector ETF IYF

Bearish:Traders who feel pessimistic about the financial sector may want to consider these alternate positions:

• ProShares Ultrashort Financials ETF SKF
• Direxion Daily Financial Bear 3X Shares FAZ
• ProShares Short Financials SEF

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