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Discover Financial Services (DFS)
NYSE - Nasdaq Real Time Price. Currency in USD
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One of the best buys in the market. Compared to Visa and Mastercard it's PE is less than a third. DFS should be trading between $200 and $250. Based on its sales. it should be considered a growth stock and have a high multiple.
Currently 280,000,000 ordinary shares outstanding. A 4 Billion dollar buyback at these price levels $107-$110 could drop another 30,000,000 off that. That would be a 10% EPS increase if everything else stays the same. DFS has repurchased more than 50% of the originally issued shares.
Hope they are buying today.
Nice, rolled my $116 calls to $118 for next week for $1.
This stock almost always sells off on earnings, good or bad.
With the earnings beat, the 20% div increase, and the 4+ billion dollar buyback, they will have a tough time beating it down this time.
DFS has had a multiple of 9 for much of it's existence - should be $140.
Awesome $120 coming
Coiled spring about to pop back over $120
Need to get back to $110
Stuck in the sand for the last 6-8 months but the numbers tell a different story. Trading @ 150 by YE and 25% dividend increase. Better hop on board investors
Giddy up. $115 is next, then $120. EC should be strong, let's see
Got back in at $109, back to $120. I love writing them juicy calls
Visa, Master Card and American Express have exposure to Russia. We do not. We have better fundamentals than ANY of them...... But WE are the one that gets punished by the market. I don't get it.
Yahoo Finance Insights
DFS is up 7.87% to 115.43
Going to be watching this carefully, hoping to open a position under $100. My thought process here is gas prices are sky rocketing and everything becoming more expensive while wages are staying the same means people are going to be using credit cards more to pay for stuff. That with Discover giving 5% cash back on gas during the month of April, I think we see some good recovery here. This paired with Discover having the best interest rates and being very user friendly.
Yahoo Finance Insights
DFS is down 5.03% to 114.51
DFS looks overvalued @2.6 x book... I'm waiting for Putin to get assassinated, that should cause a quick dip in the market and then a continuation rally. You've got to be nimble........
"diversity and inclusion" is the rightthing to do and this action will help Discover's image, moral and stock price. I support the move and the stock.
Discover Releases Its First Diversity, Equity & Inclusion Report
SELL. Never hold stock in a company like this.
Rotating out of oil stocks and took some of the profits to start a position of 2k shares at $101 this week. With the cost of everything going up there will be more credit cards and loans needed. One thing Discover has going for it is good customer service plus there identity theft protection notified me immediately of thieves trying to open cards in my name.
Discover Bank is a well run company and its balance sheet without a doubt is pristine. However I have traded in a couple of downturns (2000 & 2008) and with all sincerity and candor implore all longs to, at this time, stay off of margin.
Full disclosure, I am bearish and in cash. I personally believe the SP500 is going to test 2,600
If you are in right now, I am not saying to sell. In fact if I were you at this point I would ride the storm out and collect your dividend, which is very safe.
However if you are new to investing and wondering what a good entry point is, my take on the situation is that because of uncertainty of loan losses the financials won't bottom until July. I am not saying that DFS will lose money, what I am saying is that the market hates uncertainty. 2ndly: DFS interest spread is being hurt by the FED lowering rates to zero because, if you think about it banks will be lowering the prime rate which is what CC companies base their rates on. And 3rd: DFS will close out a fraction of their lines of credit, and when combined along with the charge offs they will probably have, DFS will take 2 or 3 years to build up their assets to what they were pre-covid. Which means it is going to take 3 years after the recession ends to start earning $9 bucks again.
I am holding out till late June when it becomes readily apparent that many of the PPP eligible small companies wont be viable or be able to higher back everyone.
Its at that time many mom and pop investors will grasp that financials are going to have a 3rd quarter with earnings worse than the 2nd quarter.
IMHO if the SP500 does retest the 2,600 area, then DFS will be around its low of $25. And if the SP500 retests its March lows of 2200 then DFS will become a teenager. Once July earnings season gets here we will all know more.
Good luck to all, both longs and shorts, it takes both of us to make a market here in the greatest country. Mr.schnieder
Since the company acts as the bank for the credit card it is getting treated as a banking stock. That part is a little unfair as the fees on charging and the margin on the debt is much higher than that of most standard bank products.
The second issue is the risk of percentage of receivables past due could spike. The last time that I mentioned this someone pointed out how low the delinquency rate this company has. The problem with that is that we have just come out of the high spending season for most cardholders and this is the time when the debt would be getting paid down. Instead large numbers of people have lost their income and many young people have lost their ability to continue paying their college debt. The ratio of delinquent and bad debt will absolutely rise, but so should charges by financially stable accounts as they use their card to ride out the current situation.
As long as this lock down only lasts through June and the economy comes back to just 85% strength within a year this appears to be a cheap stock. That being said I am willing to wait a little longer hoping for more clarity on the economy and seeing if the stock retests it's lows. If I miss the very bottom and miss a little of the run I will be finw with that.
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