Discover Financial Services (DFS)

[zephyronica]

Did I hear correctly about the news on overlimit fees?

[jimmy$teel]

As of 4:01 PM ET 8/10/09
Discover (NYSE: DFS) opened at $12.75. So far today, the stock has hit a low of $12.37 and a high of $12.90. DFS is now trading at $12.39, down $0.37 (-2.9%). Over the last 52 weeks the stock has ranged from a low of $4.73 to a high of $18.15. DFS shares are declining today after analysts at Ladenburg Thalmann initiated the stock at Sell with a $10 price target. Technical indicators for the stock are neutral and S&P gives DFS a neutral 3 STARS (out of 5) hold ranking. If you are looking for a hedged play on DFS the stock seems like it could be a candidate for a January out-of-the-money bear-call credit spread above the 15 range.

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[jimmy$teel]

I agree, that's what I meant.

[MegaTrader]

You're saying that's high? That's so low it looks suspicious.

[jimmy$teel]

So why is it so underpriced MegaTrader, it has a P.E. of 5.2.

[MegaTrader]

DFS is certainly one of the most underpriced stocks on the market, but it may take a small hit when the market does.

[jimmy$teel]

I may be wrong, but even if the market continues on an downtrend. I think DFS is going to continue upward for the near short and long term. IMO. Good Luck! MegaTrader.

[jimmy$teel]

You may be right MegaTrader, but its to late now.

[MegaTrader]

Most certainly not the time to buy, market is on the cusp of a downtrend, in my opinion.

[jimmy$teel]

Time to buy!

[jimmy$teel]

Time to buy!

[jimmy$teel]

Latest News Headlines for Discover Financial Services
Discover Financial Services Started At Buy By Jefferies
Tuesday 04/28/2009 5:57 AM ET - FW

[jimmy$teel]

Might be a big day today, glad I bought Friday.

[jimmy$teel]

Looks like they lost their 4 star ranking, down to a 3 star ranking. Must have been the reduction from a .06 dividend to a .02 dividend.

[jimmy$teel]

Getting better.

[jimmy$teel]

A guy in Ireland said this isn't a recession, it's a pre-boom. I hope he's right.

[jimmy$teel]

There was a dip today alright, but a nice increase offset it first.

[jimmy$teel]

Called that one wrong big time, getting better though. Doing well with this stock. Jimmy.

[jimmy$teel]

How come nobody likes this stock, this is a great stock. It even has an S&P four star ranking. Looking for a sharp dip tomorrow or Monday.

[jimmy$teel]

Looking for a 25% to 30% increase in the next 2 to 4 weeks.

[Soapy Bubbles]

Wow... I nailed that since Nov 15...

[Soapy Bubbles]

Starting the update on the iBOX.

[Soapy Bubbles]

Current IR: http://investorrelations.discoverfinancial.com/phoenix.zhtml?c=204177&p=irol-IRHome

[Soapy Bubbles]

FINANCIALSIncome Statement 
  Balance Sheet 
  Cash Flow 
  All numbers in millions (except per share items) Annual 
  Quarterly 
   Nov 2007 Nov 2006  
 Sales 6,434.29 5,997.46  
 Cost of Sales N.A. N.A.  
 Gross Operating Profit 2,718.73 2,522.34  
 Selling, General, and Administrative Expenses N.A. N.A.  
 Research & Development N.A. N.A.  
 Operating Income before D & A (EBITDA) 2,718.73 2,522.34  
 Depreciation & Amortization N.A. N.A.  
 Interest Income N.A. N.A.  
 Other Income - Net N.A. N.A.  
 Special Income / Charges (391.12) 0.00  
 Total Income Before Interest Expenses (EBIT) 2,327.61 2,522.34  
 Interest Expense 1,382.42 940.04  
 Pre-Tax Income 945.20 1,582.30  
 Income Taxes 356.57 505.69  
 Minority Interest 0.00 0.00  
 Net Income From Continuing Operations 588.63 1,076.62  
 Net Income From Discontinued Operations 0.00 0.00  
 Net Income From Total Operations 588.63 1,076.62  
 Extraordinary Income/Losses 0.00 0.00  
 Income From Cum. Effect of Acct. Change 0.00 0.00  
 Income From Tax Loss Carryforward 0.00 0.00  
 Other Gains / Losses 0.00 0.00  
 Total Net Income 588.63 1,076.62  
 Normalized Income 
 (Net Income From Continuing Operations, 
 Ex. Special Income / Charge) 979.75 1,076.62  
 Preferred Dividends  
 Net Income Available To Common 588.63 1,076.62  
 Basic EPS from Continuing Ops. 0.00 0.00  
 Basic EPS from Discontinued Ops. 0.00 0.00  
 Basic EPS from Total Operations 0.00 0.00  
 Basic EPS from Extraordinary Inc. 0.00 0.00  
 Basic EPS from Cum Effect of Accounting Change 0.00 0.00  
 Basic EPS from Tax Loss Carryf'd. 0.00 0.00  
 Basic EPS from Other Gains (Losses) 0.00 0.00  
 Basic EPS, Total 0.00 0.00  
 Basic Normalized Net Income/Share 0.00 0.00  
 EPS fr Continuing Ops. 0.00 0.00  
 EPS fr Discontinued Ops 0.00 0.00  
 EPS fr Total Ops. 0.00 0.00  
 EPS fr Extraord. Inc. 0.00 0.00  
 EPS fr Cum Effect of Accounting Change 0.00 0.00  
 EPS fr Tax Loss Carfd. 0.00 0.00  
 EPS fr Other Gains (L) 0.00 0.00  
 EPS, Total 0.00 0.00  
 Diluted Normalized Net Inc/Shr 
 (Net Income From Continuing Operations,  
 Ex. Special Income / Charge) 0.00 0.00  
 Dividends Paid per Share 0.00 0.00  
 

[Soapy Bubbles]

[Soapy Bubbles]

[Soapy Bubbles]

http://www.fool.com/investing/value/2008/10/15/discover-finds-it-finally-pays-to-discover.aspx

[UltimateMan]

Discover ACQUIRING Diners Club International for $165 million. This will help them create merchant acceptence railways across the world! This is definately the sleeping dragon so watchout MasterCard and Visa! It tells you that DFS has capital, management expertisem, and a growth plan to stay as one of the strongest network in the nation and now the world. The merchant acceptance gap has been closed due to their recent third party acquirer initiative. Good to bank on this on IMHO.

[wcamom]

just on "bulls and Bears" show ...DFS is extremely cheap right now and has potential to double , possibly triple over the next 2-3 years

[beware]

you r wrong, completely wrong. DFS has no growth potential at all. this is a value type stock, but growth one. and that is why MS spanoff DFS.

DFS in biz for 20 years, never has 2 digits growth, and growing is not their model, they more like stable than risky.

many chicago column writers predict DFS will be bought out in 2 years at most. to me, it worth $10/sh at current share outstanding with PE at 7. considering ongoing credit crunch, that number may even lower.

[beware]

DFS: 12% card holders are subprime, no different from captial one, they will all be the first victim of ongoing credit crunch.

[makinbacon]

Wow, no posts for 24 days... talk about dead.

Well, I think that DFS is a long term investment, and while it will probably drop a little more with all of the lending scares that are going around right now, Im going to load up while its on sale -IMO.

[makinbacon]

We tested $25 and are bouncing right back up to where we started off. In my opinion this stock is not for traders, but for investors. This company has a rich balance sheet, making a bunch of money every year. The past few years they have made a lot, possibly record numbers for the company. They continue to grow and are attempting to get into other markets. Some think that they will be bought out, and if so, I can only imagine it would be good for the shareholders. All in my opinion, ofcourse.


-MakinBacon




___________________________________________________________________
Everything I post is my opinion. Always do your own DD.

[makinbacon]

Yep, tomorrow we will find out. This company has so much room for growth, I cant imagine it dropping too much more if any.







______________________________________________________________
Everything I post is my opinion, not a recommendation.

[miko1991]

I think your call for the 25 being bottom is right, we'll see tomorow

[miko1991]

Yup me neither scottrade has EPS 0.99 but MA makes like a dollar every quarter lol

Have a great weekend too!

[eastunder]

Miko,

Schwab also has the P/E on MA shown as around the 161 range, but then they also list the earnings at 1.00 so it makes sense (math wise) as to how they came up with that huge P/E. The mystery is where they get that dollar number to begin with because MA just reported 1.57 on the first Q. LOL

Hummmm. I don't get it. Oh well. There's Lot's I don't get!

Have a great weekend!

[eastunder]

Trailing 12 months

[miko1991]

I got that from scottrade, your right it is around 40, scottrade has EPS at 0.99 with "TTM" next to it...what does TTM mean?

[eastunder]

I was going by IBD (investors business daily)
But They take the last twelve months earnings. so p/e is price divided by earnings.

so they have on MA:

june 06 @ .74
sept 06 @ 1.42
Dec 06@ .31
mar 07 @ 1.57

total = 4.04 earning for last four quarters

162.24/4.04 = 40.16

so I can see where they get their P/E

but even if you take 06 earnings at 3.41 and do the math I still come up with 47.58 p/e on MA

Where am I going wrong? How did you get that p/e on MA?

Thanks

[miko1991]

The P/E is right I show 163.3 right this moment, DFS has been down the past few day, selling pressure should ease off, the bad thing for DFS is becuase its new, you cant get a good view from the charts....

[eastunder]

Interesting article but I'm not sure they have the p/e on MA correct? LOL

I show a p/e of 40

DFS seems like a good price right here to me...at least for a starting position.

[eastunder]

Seeking Alpha
Five Credit Card Stocks to Consider When Making Your Next Purchase
Thursday July 5, 5:43 am ET


Stockerblog submits: The idea for credit cards first came about in 1887 in the book Looking Backward, written by Edward Bellamy where he used the term 'Credit Card' many times. In 1914, Western Union had implemented charge cards which it issued to some of its better customers.

Here's some credit card trivia:

What entrepreneurs used credit cards to finance their business (source: Wikipedia)?

Larry Page and Sergey Brin of Google
Robert Townsend filmmaker
Kevin Smith director
Richard Hatch producer
Bruce Kovner hedge fund manager
Spike Lee director, producer, writer, and actor

The following is a list of some credit card companies that you might want to consider when making your next purchase:

Morgan Stanley (NYSE: MS - News) just spun off its Discover Card (NYSE: DFS - News) business, which it had owned for several years. The Discover Card was originally developed by Sears. It has a P/E of 17, and according to its CEO, David Nelms, the company has been growing at over 15% per year.

American Express (NYSE: AXP - News), is the financial conglomerate that offers the famous American Express card, travellers checks, gift cards, gift checks, prepaid cards and merchant services. It also offers banking, investment and travel services. It has a P/E of 19.7, a PEG of 1.44, and it yields about 1%.

MasterCard (NYSE: MA - News) , just went public in May, 2006. Its card brands include MasterCard, MasterCard Electronic, Cirrus, and Maestro. It has a very high P/E of 160, a PEG of 2.01, and a small yield of 0.4%.

Barclays (NYSE: BCS - News) is the British financial services company, which offers banking services, investment banking, and credit cards, primarily the Barclaycard. It has a P/E of 10, and a yield of 5.1%. It has been paying dividends twice a year, for 20 years.

Citicorp (NYSE: C - News), owns Diners Club, which was the first independent credit card company in the world. It was founded in 1950. The Diners Club trademark, was acquired by Citibank, a division of Citicorp, in 1981. In 2004, the company set up an alliance with MasterCard. Citibank also owns Carte Blanche, which issues the Diners Club Carte Blanche Card. It has a P/E of 12.4, a PEG of 1.15, and a yield of 4.2%.

For your information, VISA plans on going public next year

[makinbacon]

I think they will struggle this week, since this is the first week of the spin off and the way shares were given out people might be dumping them. Im sure the holiday isnt helping either. Im guessing there will be a bottom of about $25/share and we will see some upward trend from there. Ofcourse, thats just my opinion.









_________________________________________________________________
Dont listen to me, I dont know what Im talking about. Do your own DD.

[miko1991]

Does anyone guess where the bottom is? could it be 26.15?

[miko1991]

I think it has growth potential, since it just has %5 market share of the credit market...

I read somewhere that the company, is working on making the card acceptable at more places, especiall at smaller merchants, and is getting in the debit market which is growing faster than the credit one.

I will post the source that I got this from if I find it.

Any comments?

[makinbacon]

So whats everyones thoughts on DFS?