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Doral Financial Corp. Message Board

  • brett626 brett626 Jun 17, 2006 8:34 PM Flag


    Buy recommendation. $2.00 earnings power. Problems are now behind the bank.

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    • It's also the same guy that recommended it in the mid teens. Archie MacAllister is a smart guy and has a great track record in investing in financial services companies but he, like myself, got burned on this. Accounting issues are the ultimate dagger, my hubris led me to take a 50% loss (still holding) on this stock, had a bunch of winners over the past year or so and have experience in investing in various financial services.

      I estimated a $800 post-tax write down and still got burned.

      $2.00 EPS still seems optimistic to me, I believe a $1.30 to $1.50 in normal operating conditions because remember, despite the high owneship in PR for housing, and constant demand, the fact is we're not in that insane mortgage market we were in from 2002 to mid 2005.

      MacAllister is using the $2.00 EPS to suggest a price of $16-$24 since a lot of basic regional banks go for 8-12x P/E. In my view of a normalized $1.30-$1.50 we're at a $10.40 to $18.00 range for the share price. In the mean time until there's some sort of clue as to what the real earning power of DRL is going to be longs like myself will continue to take it on the chin because of the erosion in book value. Hopefully it's essentially stopped out at around $5.00 or so for true book value but if we continue to take losses for whatever one-time reason the market will take it down.

    • Sorry but I don't read Barron's on a regular basis. What exactly does "$2.00 earnings power" mean? Is that their estimate of 2006 annual earnings? 2007? EBIT? EBITDA? "Pro Forma" (another meaningless phrase - please don't pick that one)?

    • They also recommended DRL during the big crash and before the last fall from near $17. Post the Link. I highly doubt there is one. Any fool could see the problems don't appear to be even close to being behind them! They haven't even finished restatement and now have a major deadline hanging over their heads. Newbies here should go back to see the major surprises most of us Old-timers here faced. Those of us still here likely remember all the BS PR's that were put out about how DRL would keep us updated on Restatement progress regularly and how things were going fine right before management were either fired or retired! Recent PR said 2005 numbers would be bad. I wouldn't hold or buy now until these numbers and future earnings estimate numbers are given. If PR history repeats itself we will likely get the chance of a lifetime to buy very low and lessen the risk of buying at current share price. all imo

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