Huge Disappointment in Credit Card Settlement: Mastercard and Visa Stocks Weren’t Hammered

Mastercard (MA) and Visa (V) have been great performers during this downturn. Consumers here and abroad may have overleveraged themselves to the hilt, but they’re not about to stop using credit cards, or debit cards for that matter. We've become accustomed to the ease and convenience, and that has made for an impressive stock run.

V Chart

V data by YCharts

If you've wanted to pick up either of these stocks, you've probably been waiting for the right moment, for a point where the stocks get crushed by bad news that you know is just a temporary setback. For example, last week news started trickling out that a big, expensive settlement was expected sometime between now and September. Retailers including Kroger (KR) and Walgreens (WAG) had alleged that the credit card companies had violated antitrust laws and owed the retailers buckets of money.

Well, they made it official Friday: the credit card companies and some banks agreed to pay a whopping $6.6 billion. Mastercard’s share is $790 million, Visa’s $4.4 million. And here’s what happened:

V Chart

V data by YCharts

Did you catch that? That was your buying opportunity. Alas, the market priced in the bad news before the settlement was even announced. Now the stocks are climbing again.

Better luck next time.

V Net Income TTM Chart

V Net Income TTM data by YCharts

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