Jim Cramer and Stephanie Link explain why they’re adding more credit card companies to their Action Alerts PLUS portfolio. Cramer says you want to be in non-interest margin plays because the guidance is probably not that positive for some banks but MasterCard on the other hand, is run by a brilliant guy, Ajaypal Singh Banga, and it’s quite an opportunity to get in now that the stock has come down. Link says American Express and MasterCard have a similar theme of spending heavily in 2014 and so their stocks lagged. So now, she says, that sets you up for 2015 — if the consumer stays strong and then you get a positive earnings leverage from lack of investments and the growth of these investments, they’re set up very well. Cramer adds that MasterCard is exactly what you want to buy when the economy is getting a little better.
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