This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

TheStreet.com TV Recap: Give Capital One Credit

Capital One Financial (COF - Get Report), the latest company to get hit in the lending crisis, "is an interesting situation and potentially a buy," Jim Cramer said on TheStreet.com TV's Wall Street Confidential Web video Tuesday.

The credit card company "stumbled" on its North Fork (NFB) acquisition "because they didn't really understand the mortgage market and they didn't really understand credit cards," he said. What Capital One wanted to do with the purchase was to "develop a steady source of money to be able to back up a deposit base."

That is what Capital One did with its acquisition of New Orleans-based Hibernia, and then it did it with North Fork and got the GreenPoint Mortgage business as part of the deal.

Cramer said he remembers speaking with Capital One's CFO off line, and the finance officer commented that the company doesn't really understand the mortgage business.

"It is hard to understand," Cramer said. "They bought it at the top and they've taken the ride down. Why I'm interested in [the stock] is because the credit card business is holding much better than the housing business, and that's because it makes economic sense to walk away from your house, but not your credit card."

When people walk away from their house, they go back to renting, he said. However, they have to keep their job, and, in turn, their car. They also have to be able to spend, so they keep their credit card. "The house is the expendable item."
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
COF $75.30 0.00%
AAPL $112.34 0.00%
FB $89.89 0.00%
GOOG $614.34 0.00%
TSLA $247.69 0.00%

Markets

Chart of I:DJI
DOW 16,351.38 +293.03 1.82%
S&P 500 1,948.86 +35.01 1.83%
NASDAQ 4,749.9790 +113.8740 2.46%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs