Lone Pine Capital Boosts Its Stake in MasterCard

Highlights of Stephen Mandel’s Lone Pine Capital's 4Q14 13F (Part 14 of 21)

(Continued from Part 13)

Lone Pine raises stake in MasterCard

Lone Pine Capital upped its position in MasterCard (MA) in the fourth quarter of 2014. The position accounts for 7.24% of the fund’s total fourth quarter portfolio and is its largest position. Lone Pine owns 20,030,460 shares, up from 15,082,787 shares in the previous quarter.

Overview of MasterCard

MasterCard is a technology company in the global payments industry that enables its customers to use electronic forms of payment instead of cash and checks. The company generates revenue by charging fees to issuers and acquirers for providing transaction processing and other payment-related products and services.

One of the company’s main updates in 2014 was the launch of Apple Pay, which uses MasterCard Digital Enablement Service. This is also the platform used by MasterCard’s digital payment solution MasterPass. The move was aimed at making shopping quicker and safer for merchants and consumers.

MasterCard (MA) has a 2.15% exposure to the iShares US Financial ETF (IYF). Its closest payment networks peers Visa (V) and American Express (AXP) have a 3.21% and 1.77% exposure to the iShares US Financial ETF, respectively. Visa also has a 0.71% exposure to the SPDR S&P 500 ETF (SPY).

Revenue grew 14% in 4Q14

MasterCard’s net revenue for the fourth quarter of 2014 grew 14% to $2.4 billion, up 17% when adjusted for currency. Its gross dollar volume (or GDV) was up 13%, and its purchase volume grew 12%. MasterCard’s profit grew to $801 million, up 17%, and earnings per diluted share was $0.69, up 21% from 4Q13. The company saw a 19% rise in cross-border volumes and an 11% increase in processed transactions to 11.6 billion.

The company’s operating expenses increased 26%, driven by an $87 million restructuring charge during the quarter. The company’s January 30, 2015, earnings statement noted, “The charge is related to actions to better position ourselves for the future, such as realigning some roles within the company’s business groups, redeploying resources geographically and consolidating all processing assets under one organization.”

The next part of the series will discuss the fund’s position increase in Facebook.

Continue to Part 15

Browse this series on Market Realist:

• Part 1 - Lone Pine Capital Holdings Traded During 4Q14

• Part 2 - Lone Pine Adds New Stake in Visa

• Part 3 - Lone Pine Initiates New Position in HCA Holdings