Another nontraditional financial stock McCallister likes is Fiserv (FISV), whose business is split between Internet banking and account processing for loan originations and other services. McCallister sees the Internet-banking side achieving double-digit revenue growth over the next year: "If you want to play a recovery in the banking system, we argue you should hold Fiserv; it has 10% free cash flow and is undervalued by 100%."

No. 4-ranked Fiserv processes checks, online transactions and electronic bill payments, much like the back office of a bank. Suffering guilt by association, its shares tanked last year, falling to $27.35, from a high of $58.88 in June 2007. Yet Fiserv has what many banks now lack -- profits. It earned 88 cents a share from operations in the latest quarter, beating Wall Street estimates, and its stock has climbed to $40. CEO Jeffrey Yabuki calls it "quite a good buy."

PE of 9, and a PEG of 0.70.

From a recent Mad Money show:

"Here's the problem, they're levered to financial services. Anything levered to financial services is just no good here."

Goldman Sachs said it is downgrading Fiserv (FISV) to Neutral from Buy based on limited upside potential. See modest risk/reward profile and limited near-term catalysts. Price target raised to $56 from $53.

Fiserv shares look cheap. Baring a long recession or major acquisition problems, they could rise by 30% or more in the next year.

Goldman Sachs said it is removing the Not Rated designation from Fiserv (FISV) and placing a Buy rating on the stock. With CheckFree acquisition and health business divestiture recently completed, see improved profit and attractive defensive play in current environment. Price target at $60.

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Fiserv (FISV) was upgraded to Overweight, JP Morgan said. Checkfree deal should enhance growth and give the company significant cross-selling opportunities.

Long Position Avg Cost $42

I lost money