5 Reasons to Be Bullish on Capital One
Credit card company Capital One Financial (NYSE: COF) has seen its stock price surge more than 63% year to date, and it's one of the top gainers in the financials sector. In the second quarter, the company soundly beat analysts' expectations on both earnings and revenue, generating $7.62 earnings per share (EPS) after the consensus for the quarter was only $4.54.
Despite the big run-up in its stock price, I still see plenty of reasons to remain bullish on the company and believe there's further upside. Here are five reasons in particular.
There was some noise in the second quarter, but period-end loan balances grew 3% from the sequential first quarter, and were down 1% on a year-over-year basis. Meanwhile, average loan balances grew 1% from the sequential quarter and were down 3% from the second quarter of 2020. These numbers, however, included moving $4.1 billion of loans held for investment to loans held for sale during the quarter. If the $4.1 billion had not been moved, period-end loan balances would have grown 4.3%, which is pretty good considering loan growth has been muted across the industry. On the loan front, the consumer has shown more signs of bouncing back than commercial customers, which is more beneficial for a credit card company like Capital One.
Source Fool.com
