Discover Financial Services (NYSE:DFS)

ValueMc (59.86) Submitted: 8/8/2007 2:23:04 PM : Start Price: $22.87 DFS Score: +50.07

Spin offs are counter intuitively great stocks to own in many cases. Discover has tanked since it's debut in a weak market for financials. They are one of the very few closed loop networks in the credit card arena, and future collaborations with established merchants should fuel significant growth in the years ahead. Independance from Morgan Stanley should also allow for renewed focus. Visa, Mastercard and American Express are far and away the leaders but there is plenty of room for Discover to thrive. Cash flow has never been a problem here.

Hockey5djh (< 20) Submitted: 8/8/2007 11:06:59 AM : Start Price: $22.83 DFS Score: +50.29

I think the biggest knock on this stock is that it started out as a spin off. Discover may not be as big as mastercard or visa but they can hold their own. Recently they've started to bump up their advertising in hopes to turn the big two into the big three. Also ATM/Debit capabilities give this company something that the other two don't have.

raytoei (96.32) Submitted: 8/7/2007 4:26:12 AM : Start Price: $20.90 DFS Score: +61.31

dfs is the smallest among the other card issuers. However, this company has alot of potential, it generates around 1bn of profits a year, making the current valuation at 12.1 trailing p/e.

phyonker (85.09) Submitted: 8/3/2007 2:09:55 PM : Start Price: $21.12 DFS Score: +59.99

Company is a value in low 22 or high 21's Selling now on consumer spending fear and number 4 player in Credit market. They have plenty of cash on better credit selection than AE. They now have the option to expand. they are low cost leader in merchant fees of 1.75% below AE and MC. This should help them expand base of 4mm merchants

bugolfer (97.15) Submitted: 8/3/2007 12:37:33 PM : Start Price: $21.29 DFS Score: +58.77

This company is just getting too cheap to avoid. The only card compnay that owns a debit network and a credit network. It is definitley a takeover target as well. Which bank (besides Morgan Stanley) wouldn't want to own this company?

tmcmill81 (64.77) Submitted: 8/2/2007 9:30:46 PM : Start Price: $21.48 DFS Score: +57.96

Good entry point. Who knows what they have in store. However, it may take a couple months to show where the company really stands.

tty4nik8r (< 20) Submitted: 7/23/2007 11:28:57 PM : Start Price: $24.21 DFS Score: +44.38

Return on investment at DFS is 17% compared to 7% at AXP. That means DFS should double in 5 years not 10. Currently AXP has a P/E of 20 while DFS has a P/E of 14. Therefore, DFS is undervalued and grows money at a faster rate than a compareble company AXP.

Excluding any intelligent management decisions to enhance shareholder value this stock ought to go to at least 38 within six months.

scookstlmo1 (39.41) Submitted: 7/13/2007 9:11:14 PM : Start Price: $25.79 DFS Score: +37.17

great spinoff, more like AXP than MA, which are both excellent businesses; DFS has a lot of room for growth

NYCBanker (27.19) Submitted: 7/12/2007 11:57:27 PM : Start Price: $25.09 DFS Score: +40.48

Spinoffs are generally undervalued and trade down immediately after being seperated from the parent (a lot of involuntary owners). Discover has had its pullback and people don't yet understand its story. It is in an oligopoly market, is the 6th largest issuer of credit cards of all types, has a top 5 debit network (Pulse) and has plenty of room to grow in an environment where the "pie" is growing 12% per year. Doesn't even have to out perform to be a solid pick.

Beznas (< 20) Submitted: 7/12/2007 10:52:26 AM : Start Price: $24.78 DFS Score: +41.24

The recent drop of 12% makes this a bargain at current prices. Expect some share buybacks.

bmorten (76.02) Submitted: 7/12/2007 10:21:28 AM : Start Price: $24.71 DFS Score: +41.39

Undervalued relative to comps and a likely acquisition target.

bdbartle (28.72) Submitted: 7/10/2007 8:33:26 AM : Start Price: $24.27 DFS Score: +43.56

Morningstar 5-star

shirleyb123 (71.21) Submitted: 7/9/2007 12:09:54 AM : Start Price: $24.38 DFS Score: -43.45

Volume of trades will probably be brisk for a short time. With the spinoff, new shareholders may want to sell creating a poor suppply/demand scenario.