Capital One shares hit a new record high on Wednesday, and Jim Cramer believes it hasn’t been running yet. The credit card issuer’s shares rose 6.9% Wednesday morning despite a raucous quarterly revenue report on Tuesday evening. The stocks fell off the highs of the session, but nonetheless, Capital One’s revenue report examined Cramer’s longstanding belief that financial stocks could rise even further now that the smash hit $35 billion Discover acquisition is complete. Capital One is seeking “global domination” in the credit card industry, Cramer said on Wednesday’s “Squawk On the Street.” Owning Discove’s coveted payments network, Capital One is in a position to compete with American Express to reduce the fees it pays to MasterCard and Visa and pursue its high-priced clients. American Express was previously the only card issuer that owned a payment network. Cramer, who runs CNBC Investing Club, said longtime Capital One CEO Richard Fairbank “is aiming for that.” Cramer’s Charitable Trust, a portfolio used by the club, won a stake in Capital One in early March. “He’s going to go on a global card, and I’m not against Richard Fairbank. [a share] Capital One currently trades forward revenues about 12 times as much as it is now, according to Factset, while American Express is in charge of a P/E ratio of 19. [if it trades closer to American Express’s valuation]and that’s why this stock is roaring today,” he said. Fairbank repeated its profits from Discover transactions during its revenue call on Tuesday. Now, Capital can not only issue credit cards, but also collect fees from transactions. We are trying to take advantage of this rare and valuable opportunity,” he said. The Investment Club has increased its position in capital several times this year.
