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Cramer financial fave returns 40% ytd

Wednesday, 16 Oct 2013 | 6:15 PM ET
KeyCorp CEO: Taking share & leading our peers
Wednesday, 16 Oct 2013 | 6:15 PM ET
KeyCorp CEO Beth Mooney discusses which areas the company is "taking share" and growing the fastest, and whether Washington worries could impact its bottom line. "I don't think a resolution in Washington will necessarily unleash any sort of pent up demand," she says.

(Click for video linked to a searchable transcript of this Mad Money segment)

This is one of my favorite banks out there, said Cramer.

If you watch Mad Money regularly you know that the resurgence of the regional banks is one of many long-term investable themes that Cramer introduced at the beginning of the year. Back on January 7th, Cramer said if he could play the theme with only one bank it would be KeyCorp. "I think it's the most undervalued regional and should benefit from a resurgence in the heartland," he said at the time.

Fast forward 10 months, and the price action in KeyCorp appears to confirm Cramer's aplomb for picking winners.

Shares are up over 40% year to date. That's more than twice the S&P 500.

And with over a thousand branches across 24 states in the Midwest, the Northeast, and the Pacific Northwest, Cramer thinks KeyCorp is well positioned going foward.

In part that's because Cramer expects a recovery in housing to pick up steam.

If KeyCorp's recent earnings are any indication, business has already picked up steam; the latest results released Wednesday showed profits rose and loans increased

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Looking at the numbers a little more closely, Net income after preferred dividends was $266 million, or 29 cents per share, for the three months ended Sept. 30. That compares with $214 million, or 23 cents per share, a year earlier.

Analysts surveyed by FactSet expected earnings of 23 cents per share on revenue of $1.02 billion.

That alone would support Cramer's bullish outlook; however, there's more.

"The company holds a lot of excess capital and they are aggressively returning it to shareholders," Cramer said. "In this quarter alone, Key bought back 16 million shares, that's 2% of the total share count."

That too should drive an advance

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Cramer has recommended this stock for quite some time. And he's putting money where his mouth is. "I like it so much that we own it for the charitable trust," he added. "It's just a very well managed bank."

*Disclosure: On October 16th Jim Cramer owned shares of KeyCorp on behalf of his charitable trust

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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