Stock Research Report for DFS as of 7/27/11 - Chaikin Power Tools

Page 1

Discover Fin Sv (DFS)

Price: $26.08

Industry: Finance Chaikin Power Gauge Report | Generated: Wed Jul 27 11:30 EDT 2011 DFS Discover Fin Sv

$26.08

Power Gauge Rating

DFS - Neutral TM

The Chaikin Power Gauge Rating for DFS is neutral with very attractive financial metrics, very strong earnings performance, very bullish price/volume activity and very positive expert opinions.

Financial Metrics

DFS's financial metrics are excellent due to a high return on equity. Earnings Performance

DFS's financial metrics are excellent due to a high long term debt to equity ratio.

Price/Volume Activity

Despite these bullish factors, Chaikin Power Tools has identified a negative trend resulting in a neutral rating.

Expert Opinions

News Sentiment Rating

Neutral DFS Discover Fin ..

July 20, 2011

TM

Chaikin Sentiment Gauge for DFS is neutral. Stories concerning DFS have a balanced or neutral sentiment.

News Sentiment :Neutral

Power Trend - 5 Year Chart

The Power Gauge distills a 20 factor model into a concise picture of a stock's potential.

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High Potential

Neutral

Low Potential

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Financials & Earnings

Financial Metrics

Financial Metrics Rating

Very Bullish

LT Debt/Equity Ratio

DFS's financial metrics are excellent. The company yields a high return on shareholder's equity and generates high free cash flow relative to market capitalization.

Price to Book Value

Return on Equity

The rank is based on a high long term debt to equity ratio, high return on equity and relatively high cash flow.

Price to Sales Ratio

Business Value

Assets and Liabilities

Valuation

Returns

Ratio

TTM

Ratio

TTM

Ratio

TTM

Current Ratio

1.44

Price/Book

2.20

Return on Invest

6.7%

LT Debt/Equity

2.74

Price/Sales

1.73

Return on Equity

24.7%

Earnings Performance

Earnings Performance Rating

Very Bullish

Earnings Growth

DFS's earnings performance has been very strong. The company has a history of strong earnings growth and has outperformed analysts' earnings estimates.

Earnings Surprise

The rank is based on high earnings growth over the past 3-5 years, better than expected earnings in recent quarters, an upward trend in earnings this year, a relatively low projected P/E ratio and inconsistent earnings over the past 5 years.

Earnings Trend

Projected P/E Ratio

Earnings Consistency

5 Year Revenue and Earnings Growth

Revenue(M) Rev % Growth EPS EPS % Growth

EPS Estimates

11/06

11/07

11/08

11/09

11/10

5,997.46

5,051.87

6,957.02

10,378.75

8,241.22

Quarterly EPS

17.32%

-15.77%

37.71%

49.18%

-20.60%

Yearly EPS

$2.26

$1.18

$1.93

$2.42

$1.23

86.78%

-47.79%

63.56%

25.39%

-49.17%

EPS Surprise

Factor

Factor

Actual EPS Prev

EST EPS Current

Change

$0.47

$0.80

+0.33

$1.23

$3.49

+2.26

Actual EPS Growth

Est EPS Growth

Change

13.57%

12.33%

-1.24

3-5 year EPS

EPS Quarterly Results Estimate

Actual

Difference

% Difference

Latest Qtr

$0.72

$1.09

$0.37

51.39

1 Qtr Ago

$0.53

$0.84

$0.31

58.49

2 Qtr Ago

$0.42

$0.64

$0.22

3 Qtr Ago

$0.35

$0.47

$0.12

FY

Qtr 1

Qtr 2

Qtr 3

Qtr 4

Total

11/09

$0.25

$0.43

$1.09

$0.63

$2.40

11/10

$-0.22

$0.34

$0.47

$0.64

$1.23

52.38

11/11

$0.84

$1.09

-

-

-

34.29

Fiscal Year End Month is November.

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Price Trend & Expert Opinions Price/Volume Activity

Price/Volume Activity Rating

Very Bullish

Relative Strength vs Market

Chaikin Money Flow

Price and volume activity for DFS is very bullish. DFS has outperformed the S&P 500 over 26 weeks and is experiencing sustained buying.

Price Trend

The rank for DFS is based on its price strength versus the market, positive Chaikin money flow, a positive Chaikin price trend, a negative Chaikin price trend ROC and an increasing volume trend.

Price Trend ROC

Volume Trend

Relative Strength vs S&P500 Index

Chaikin Money Flow

Chart shows whether DFS is performing better or worse than the market.

Chaikin Money Flow analyzes supply and demand for a company's stock.

Price Activity

Price Activity

Factor

Value

Factor

52 Week High

27.52

52 Week Low

13.91

% Change YTD Rel S&P 500

31.05%

Expert Opinions

Volume Activity Value

Factor

% Change Price - 4 Weeks

5.20%

Average Volume 20 Days

7,344,930

% Change Price - 24 Weeks

26.54%

Average Volume 90 Days

6,437,471

% Change Price - 4 Wks Rel to S&P

0.19%

% Change Price - 24 Wks Rel to S&P

24.54%

Value

Chaikin Money Flow Persistency

80%

Expert Opinions

Very Bullish

Earnings Estimate Revisions

Expert opinions about DFS are very positive. Analysts are raising their EPS estimates for DFS and shorting of DFS is low.

Short Interest

Insider Activity

The rank for DFS is based on analysts revising earnings estimates upward, a low short interest ratio, insiders not purchasing significant amounts of stock and optimistic analyst opinions.

Analyst Opinions

Relative Strength vs Industry

Earnings Estimate Revisions Current Current Qtr Next Qtr

0.82 0.78 Current

Current FY

3.55

Analyst Recommendations

7 Days Ago % Change 0.80 0.77

+2.50% +1.30%

30 Days Ago % Change 3.33

0.22

Factor Mean this Week Mean Last Week

EPS Estimates Revision Summary Value

Buy 0.00

Mean 5 Weeks Ago

Buy

Last 4 Weeks

Down

Up

Down

Curr Qtr

0

0

2

0

Curr Yr

0

0

4

0

Next Qtr

0

0

2

0

Next Yr

0

0

4

0

Buy

Change

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Last Week Up

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The Company & Its Competitors

News Headlines for DFS

DFS's Competitors in Finance Company

Power Gauge

Historic EPS growth

Projected EPS growth

Profit Margin

PEG

PE

Revenue(M)

DFS

13.57%

12.33%

22.75%

0.61

8.58

8,241

EZPW

28.83%

15.00%

13.64%

0.86

13.59

733

4.31%

15.00%

6.71%

0.62

10.43

600

CACC

17.31%

-

39.20%

-

13.56

442

COF

10.77%

9.80%

19.17%

0.69

6.43

19,067

NNI

1.51%

17.00%

17.91%

0.28

3.94

1,062

WRLD

15.15%

-

18.57%

-

12.15

491

SLM

42.41%

10.00%

1.88%

0.89

7.80

6,776

AEA

Business events scheduled for Thursday - Jun 22, 2011 Discover Financial to buy back $1 billion in stock - Jun 15, 2011 Discover Financial Services Announces $1 Billion Share Repurchase Program - Jun 15, 2011 Tree.com sells mortgage unit to Discover Financial - May 12, 2011 Discover to Acquire Mortgage Origination Business from Tree.com for $55.9 Million - May 12, 2011

Company Details

Company Profile

DISCOVER FIN SV 2500 LAKE COOK ROAD RIVERWOODS, IL 60015 USA Phone: 224-405-0900 Fax: 224-405-4993 Website: http://www.discoverfinancial.com Full Time Employees: 10,300 Sector: Finance

Discover Financial Services operates the Discover Card with more than fifty million cardmembers, the Discover Network with millions of merchant and cash access locations, and the Goldfish credit card business in the United Kingdom. Discover Financial Services also operates the pulse ATM/debit network, which serves more than four thousand four hundred financial institutions and includes nearly two lakhs sixty thousand ATMs, as well as POS terminals, nationwide.

Power Gauge Ratings are created using a relative ranking system that assigns a rank of 0 to 100 (100 being the highest) to each stock in the universe. Rank is calculated by evaluating each of the stocks factors and combining them into a single number using a weighting formula. A stock's rank ranges from 100-0, where 100 is the strongest, and a rank of 95 indicates the stock is better than 95% of the stocks in the universe. Chaikin Stock Research(CSR) is not registered as a securities broker dealer or investment advisor with either the U.S. Securities and Exchange Commission or with any state securities regulatory authority. CSR is not responsible for trades executed by users of this research report, our web site or mobile app based on the information included herein. The information presented in this report does not represent a recommendation to buy or sell stocks or any financial instrument nor is it intended as an endorsement of any security or investment. The information in this report is generic by nature and is not personalized to the specific financial situation of any individual. The user bears complete responsibility for their own investment research and should seek the advice of a qualified investment professional before making any investment decisions. Copyright (c) 1978-(Present) by ZACKS Investment Research, Inc ("ZACKS"). The information, data, analyses and opinions contained herein (1) includes the confidential and proprietary information of ZACKS, (2) may not be copied or redistributed, for any purpose, (3) does not constitute investment advice offered by ZACKS, (4) are provided solely for informational purposes, and (5) are not warranted or represented to be correct, complete, accurate or timely. ZACKS shall not be responsible for investment decisions, damages or other losses resulting from, or related to, use of this information, data, analyses or opinions. Past performance is no guarantee of future performance. ZACKS is not affiliated with Chaikin Power Tools. This report from Chaikin Power Tools is for informational purposes only and is not a recommendation to buy or sell securities.

LM 2.3 DS 3.0 LS 2.1

Data Provided by ZACKS Investment Research, Inc., www.zacks.com

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