Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

In a bid to fortify its roots in the rapidly growing emerging markets, MasterCard Inc. (MA - Analyst Report) disclosed its intention to acquire Turkey’s leading independent payment solution provider and processor − Provus Bilisim Hizmetleri AS (Provus). However, the terms and value of the deal have yet to be revealed.

Based out of Istanbul, Turkey, Provus is a 12-year old company that offers issuer, merchant acquiring, prepaid and ATM payment processing solutions, to financial institutions, telecommunication service providers and retailers.  Subject to regulatory approvals, the deal is expected to culminate by the end of 2013.

Furthermore, the deal blends well with MasterCard’s long-term strategy of building secular growth through innovative organic initiatives. Over the past couple of years, the company has been strengthening its foothold in the prepaid cards space and mobile commerce (m-commerce). These initiatives have been taken to adapt to the changing market dynamics and navigate through regulatory challenges faced within the credit and debit card businesses.

These initiatives have also helped the company better penetrate into the global markets. Expansion in Turkey will now strengthen MasterCard’s footprint within Europe as well. Hence, the acquisition of Provus appears to be a well-fit in the company's business basket.

Moreover, MasterCard is armed with a strong operating cash flow of $1.61 billion at the end of Jun 2013, which surged about 51% from the year-ago period, along with a risk-free balance sheet, strong expense management and double-digit financial growth. We believe such strong fundamentals progressively support the company’s capital deployment efforts.

Additionally, MasterCard is consistently taking effective steps to penetrate into the emerging markets. Earlier this week, the company launched the first prepaid travel card in Myanmar, via its alliance with CB Bank in the country. MasterCard also tapped the Italian market by partnering with Eataly, thereby boosting cashless payments.

Along with MasterCard, other strong peers such as Visa Inc. (V - Analyst Report), Fiserv Inc. (FISV - Analyst Report) and Xoom Corp. (XOOM - Snapshot Report) carry a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
GENERAL FINA GFN 8.20 +5.67%
QIHOO 360 TE QIHU 91.57 +4.38%
VIPSHOP HOLD VIPS 140.01 +3.49%
INVESTMENT T ITG 19.16 +3.34%
VERTEX ENERG VTNR 7.38 +3.07%