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Doral Financial Corporation Message Board

  • I bought 2000 shares at about 20. Is there someone here who could tell me this wasn't stupid? Or should I just take my losses and run. Any time line here for the turn around? This is one stock I can't figure out. Thanks in advance for your help.

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    • #11601 correction.

    • My message was posted as a reply to message #6601.

    • Since nobody has answered my question, I have gone to the annual report to take a look.

      Potentially, the IOs are overstated by $600 million and that won't affect forward earnings, but that will leave 200 to 300 million in IO's still on the books.

      If the IOs are completely written off in the next year, wouldn't that cut earnings by at most $300 million. That would leave earnings somewhere around $150 million. Thats $1.40 per share.

      This is all assuming worst case with the IOs and no other accounting issues. That would put next year's PE valuation at around 10 and then in the future much lower.

      Does that make sense?

      • 1 Reply to dpsimswm
      • <"If the IOs are completely written off in the next year, wouldn't that cut earnings by at most $300 million. That would leave earnings somewhere around $150 million. Thats $1.40 per share.">

        That's not quite correct since DRL had approximately $293MM in FIXE DRATE IOs that do not change in value as a result of interest rate changes. DRL is writing down $600MM of FLOATING RATE IOs that have significant volatility because of interest rates. Therefore, the IOs being kept on the books will have no chance of being written down next year. The only way for more impairments now is if DRL keeps issuing floating IOs on mortgages and short-term rates trend much higher; however, DRL has already stated they will not do this and will change to more of a cash-gain system. In short, probably 0 impairments this year and next IMHO.

    • Why not wait till ER? Not a long wait.

    • Read my posts about buying some puts to cover your butt. This stock has a 50% chance of being delisted in the next few months. $2-3 pink sheet value. Just want longs to see the light of day. This is my opinion that has come from being long on more than a few of these type of stock and I never saw it coming. Now I see it! Good Luck ALL!

 
DRL
3.61+0.23(+6.80%)Dec 26 4:02 PMEST

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