3. Capital One Financial
Capital One Financial (COF) is a great company, but it has not shown big growth in its earnings over the 10-year historical period. But enterprising investors should feel very comfortable proceeding with further research into the company and comparing it to competitors like JPMorgan Chase (JPM).
From the valuation side of things, the company appears to be significantly undervalued after growing its EPSmg (normalized earnings) from $3.14 in 2009 to $6.56 for 2013. This solid level of demonstrated growth surpasses the market's implied estimate of 1.67% earnings growth and leads the ModernGraham valuation model to return an estimate of intrinsic value that is well above the market price.
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