Capital One trips up

An earnings miss sends the bank's shares downward. Is this a sign of weakness, or the right time to buy?

By Motley Fool Investor Beat Jan 17, 2014 3:33PM
Shares of Capital One (COF) fell more than 4% Friday on news that the company missed expectations this quarter in earnings and revenue. In this video, Fool analyst Brendan Mathews digs into what happened this quarter with COF, and what the outlook is for the company over the next few years.

Capital One, like many financial businesses at the moment, struggled with net margin compression this quarter, or the spread between what it pays out to depositors vs. what it earns on its investments.
Combining that broad trend with the company's heavy reliance on credit card and auto loans which are struggling markets at the moment, COF certainly faces some near-term headwinds.Bank sign © John Foxx, Stockbyte, Getty Images

That said, Brendan really likes the company's long-term prospects. Capital One 360 is currently the nation's largest Internet bank, and Brendan considers CEO Richard Fairbank to be a very savvy leader. He sees Capital One at 11 times earnings to be a great opportunity to buy a stock that he sees as a market beater over the next three to five years.

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Tags: COF
1Comment
Jan 17, 2014 8:11PM
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A future Republican in the making.

http://www.youtube.c​​​​​om/watch?v=AukE2​5​i​s​p​VY

They are simply adorable and loving little things aren't they?
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