Capital One Financial Corp. (NYSE:COF)

relative under performer. Financial stock sellers may be done here.
Note: C & XLF are unperform 4-19

Capitol One weathered the financial crisis better than most, although its stock price took a beating along with most other banks. The company made a savvy and incredibly cheap acquisition of ING Direct at book value. Most importantly, as a pioneer in customer data mining, Capitol One is well positioned to sort out the profitable customers from the less profitable ones as financial regulations change the calculus.

MACD Crossover 02/08/13

Technicals

Based on Graham number valuation

Good at managing the risk

Different than most financial services companies...while most banks have been laying off employees Capital One had its biggest hiring class to date this year. Additionally, they have been spending cash on acquisitions in the mobile payments space, indicating that they are looking to continue on the path of innovation.

Ugly logo. Annoying commercials.

Current Graham number valuation $102.33

Underpriced.

follow Edward Lampert ESL Investments p/e 7.41

8x earnings < 8.6% growth rate. Toss in a small dividend, and Cap1 looks like a winner.

Top notch management

Hate the commercials & hate the company but decent ROE P/E, and growth makes me think it'll go higher

After the financial crisis, COF has showed that it could both weather the drying up of funding in the subprime space and quickly make a comeback, dominating the industry. Their ability to quickly pay back the TARP funds and strong earnings in Q1 and Q2 of 2011 are an indicator of future success.

Probably won't increase in stock price anytime soon, but I have a Checking, Savings, and 2 Credit Cards from them. Best rewards, best customer service.

On another note, I went into BAC today and the representative knew nothing. She had to call corporate to answer any of my questions. COF's strategy of mostly online and some branches (for the old folks, I'm guessing) is smart. I hate driving to places and their customer service is top-notch. Twice, they walked me through something for 30 minutes as if I was one of them and not some person to get money off of.

Low PEG
Low PE
Low P/FCF

http://dragonflycap.com/2011/04/24/top-trade-ideas-for-the-week-of-april-25-2011-the-first-5/
Capital One broke through resistance at 52.93 on Thursday with strong volume and looks to go higher. The RSI is steeply sloped but still has a lot of room before being overbought and the MACD has just crossed positive. The first target higher on a MM is at 54.50 and then the second at 65. Use the breakout level as a stop area.

Undervalued company.