We think Capital One's scale and brand name will benefit the firm in the long run.
Visa is a constant target of regulators throughout the world, and attacks on the firm's business model are unlikely to stop.The exclusion of Visa Europe from the IPO undermines the firm's ability to negotiate agreements with large global bank clients such as HSBC.American Express has been stealing
MasterCard has been a target of numerous lawsuits alleging anticompetitive behaviors. Resolution of these lawsuits could cost the firm billions of dollars and lead to substantial stock price volatility.If the interchange fees charged to merchants decrease substantially, banks that issue MasterCard
Discover possesses a network that is hard to replicate, and Diners Club adds revenue upside.
A global card network and premier brand should benefit Amex in the long run.
CapitalSource's historical underwriting leaves a lot to be desired.While many of its rivals in the "shadow banking" system did not survive the credit crisis, CapitalSource is now competing with banks with more experience, greater resources, and possibly fewer restrictions.As a California
Nelnet has yet to prove that it possesses a sustainable competitive advantage in the education services business.Loan servicing contracts with the government are not likely to produce exceptional profits. Higher costs of education and increasing enrollment are expanding the market for Nelnet's
Orix's relatively small customers are more vulnerable to an economic downturn.Orix benefited from a low cost of funds while Japan maintained near-zero interest rates. Margins and earnings could be hurt by future rate increases.As a nonbank lender, Orix depends on the constant availability of
A prolonged inability to securitize loans will hurt the company's ability to grow.Citigroup, the company's largest shareholder, does not consider Student Loan Corp. to be a core business.The elimination of the FFELP program could result in a slow death for the company.Rising tuition costs and
AmeriCredit's viability depends heavily on economic and market factors beyond its control.Inability to securitize auto loans at reasonable rates could affect both margins and the company's ability to continue origination activities.Loan defaults could skyrocket if various forms of debt accumulated