'RealMoney' Radio Recap: Capital One Idea

After the president's speech Thursday night pledging to rebuild New Orleans, Jim Cramer wants to buy the soon-to-be largest bank in Louisiana, Capital One Financial (COF Quote).

Cramer noted Friday on his "RealMoney" radio show that Capital One is set to acquire Hibernia (HIB Quote), Louisiana's largest bank. Cramer said he believes the president's "mission" to rebuild New Orleans through the use of private accounts will be a boon to the banks.

Capital One, the last remaining public credit card company, is sure to take a hit as displaced customers struggle to pay their credit card bills. But Cramer believes those concerns are priced into the stock, and before the hurricane the credit card business had been showing strong improvement. The stock is "a bargain," he said.

Finally, Cramer said Capital One is likely to be a takeover target at the hands of Wachovia (WB Quote). Wachovia has a relationship with MBNA (KRB Quote), which is being acquired by Bank of America (BAC Quote). Bank of America and Wachovia are bitter rivals, so Wachovia will likely end its relationship with MBNA once MBNA becomes part of Bank of America, Cramer said. Wachovia will then probably "make a run" at Capital One "to do its credit cards" because it will be the only remaining independent public credit card company.

Meanwhile, if you buy Capital One, what you have are improving fundamentals and the "biggest bailout I've ever seen," said Cramer.

A caller asked why Dresser-Rand (DRC Quote) hadn't been more forthcoming with information about its business in the wake of Hurricane Katrina. Cramer said he believes the company is "not used to being public," and "maybe we can excuse that." Cramer would buy the stock, as he said he expects it to go to $30. Dresser-Rand traded at $24.30 Friday.

A caller wanted to know if the buying in Hoku Scientific (HOKU Quote), which is up about 65% the past two days, had been overdone. The newly public company was the subject of two bullish research reports Thursday, and Cramer also spoke positively of the stock on his "Mad Money" TV show. Cramer said the stock had "moved too much," and he would wait for a pullback before buying. However, he added, the company, which has research and development agreements with Nissan, Samsung and the U.S. Navy, is making money and is "for real." But it's not the same stock at $10 as it was at $5, said Cramer.