Jim McGovern Capital One Financial Corp COF-N TOP PICK Jun 05, 2017

The company itself is fine, but the capital/lending cycle concerns him, where bankruptcies will increase and decrease earnings, buybacks and dividends.

His favourite in this industry, given the Discover-Capital One merger because he doesn't expect usery fees.

The merger with Discover creates the largest credit card company in the US. COF's balance sheet is strong.

With regulation ahead, it's now more likely that their deal with Discover Financial will finally close--it's been taking forever. If so, COF could go up 25 points. No matter what, COF will be fine.

The merger with Discover is complete. It's his favourite holding. Despite gaining 20 points in May, he sees more upside and analyst upgrades.

Tuesday they deliver commentary which he expects to be positive about their synergistic deal with Discover. Maybe that's why shares were up today.

Banks are a winning sector and his favourite here is COF. It just closed a deal with Discovery Financial, which will turn COF's credit card business into a bigger business.

The stock has run up recently after buying Discover, a major payment network that issues its own cards, but also processes payments. Visa and Mastercard don't do both. COF can scale up to a global payments platform. There's a prediction of a $7-10 billion share buyback after an internal review. Sells at a cheap 11x 2026 PE vs. AmEx's 20x PE. This has a lot more room to run.

Discover deal is closed, and net interest income is 32%. Hitting a new high today.