Since debuting on the market three years ago, MasterCard has proven itself to be a sustainable growth story, but its underrated stock still has a PEG ratio of just 1. Because the company is a "toll collector" that profits from transaction fees, it's insulated from the deteriorating consumer credit environment.
Tom Marsico, manager of the USAA Aggressive Growth Fund, is impressed with MasterCard's management. "Coming from a banking environment, they've done a good job of cutting costs," he says. The company has lifted its operating margin by nearly twenty percentage points since June of last year.
--M.K.
