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?
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.
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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