Capital One Financial Corp. (COF), American Express Company (AXP): With Most Financials Skyrocketing, Here’s One That’s Still Worth A Look

Discover is in the same boat, even more than American Express perhaps, as their chart is starting to look parabolic lately. Up over 15% in the past three weeks alone, I think it may be time for Discover shareholders to be cautious, or maybe even take profits. I wrote about Discover about two weeks ago, however with the spike in share price, the fundamentals have changed considerably in that short time. My thesis is still valid, and I love Discover long-term. I’m especially curious to see how their PayPal deal plays out. However, at this point I would wait for the price to correct itself a bit. For those who took my advice and invested in Discover a couple weeks ago, you may want to consider taking at least some of your profits off the table.

Finally, just a few brief comments about the non-direct issuers Chase and Bank of America, which mainly issue Visa and MasterCard credit cards. Chase is a division of JP Morgan, which is by far my favorite overall financial company. I also wrote about JP Morgan recently, which even at its 52-week high, I still feel it is undervalued. Their acquisitions during and after the financial crisis have made them such a strong and well-rounded company.

Bank of America, on the other hand, has come too far too fast. I am yet to hear a solid argument that justifies their almost doubled stock price over the past year. Until they develop a track record of earnings growth, and above all, stability, I cannot advocate Bank of America as anything but a speculative investment at this point.

So Why Capital One?

With great alternatives, such as those mentioned above, why choose Capital One? The short answer is that it is the one that is still cheap. At just 8.8 times earnings, and with a 9% projected forward growth rate, Capital One is too attractive to ignore. Shares are still over 12% below their 52-week high, even after the market has continued making new highs.

I love Capital One because of its aggressive growth and for the nature of that growth. ING especially was a great move for the company, as it increased Capital One’s deposits by over 75% and creates myriad possibilities for expansion going forward.

The article With Most Financials Skyrocketing, Here’s One That’s Still Worth A Look originally appeared on Fool.com and is written by Matthew Frankel.

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