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Flagstar Bancorp Inc. Message Board

  • larrywalker larrywalker Jan 5, 2004 3:20 PM Flag


    Looking at key stats for this stock, I find many positive indicators. First, using a LOW earnings estimate for '04 of $2.15 gives a conservative forward P/E of approx. 9.7, contrasted to the sector's present P/E of 17! The book value of FBC is right at 2x, compared to the sector BV of 2.3x. FBC has almost $25 per share in cash and less than $3.00 of debt per outstanding share. The FBC dividend of 2.8% slightly exceeds the sector avg of 2.5%. FBC has a P/S ratio of about 2.6, which is good, and a five-year PEG ratio of about .4, which is very attractive. Also, the stock has already pulled back over $5.00 per share, likely caused by concerns about a reduction in refinancing of mortgages. About the only downside I can perceive is the investors' concerns about the prospect of rising interest rates. With rates as low as they presently are, there will not likely be much slowdown in financing, given the positive forecasts on the economy and the small increases in interest rates that might be expected during the next twelve months. There was plenty of lending taking place years ago when interest rates were 300 to 400 basis points higher than the present rates. Because of these factors, I bought FBC on Friday and will likely purchase more on any significant pullback. These are my observations. I would appreciate hearing yours. I wish you all a very profitable 2004 and 2005!

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    • larrywalker:
      From the tone of your post, I don't believe you meant to mislead anyone, but is it relevant to point out that FBC (accurately as of last 9/30) has almost $25/share in cash when they also had (same date) almost $150/share in current liabilities?

      • 1 Reply to observer_65
      • I got my info from "key statistics" (left column of message board.) I divided the total debt by the number of outstanding shares in order to arrive at my stated figure. The statistics also state the amount of cash per share. Please check the source I have cited. And, no, I don't intend to mislead anyone, especially myself, since my money was spent to purchase FBC. Thanks for the reply.

18.30-0.21(-1.13%)Jul 31 4:01 PMEDT

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