Use access key #2 to skip to page content.
$1.96 -0.77 (-28.21%)
7/24/2008 2:42 PM

Downey Financial Corp. (DSL)

CAPS Rating:
*

The Company operates as the holding company for Downey Savings and Loan Association, F.A. that provides financial services to individual and corporate customers and engages in real estate development activities, primarily in California.

X

Rating a stock in CAPS consists of three components:

Your call - Will this stock outperform or underperform the S&P 500? Successful picks are measured in terms of whether or not you were correct and by how many percentage points.

Your time frame - A guideline for other members to see whether your thinking is short or long-term. Time frame is also used to calculate the stock rating, but is not used in the scoring of your pick.

Your pitch - Here's your chance to offer more detailed thoughts, analysis, concerns, or the rationale behind your call. The pitch is optional and may be added later.

Each time you rate a stock, CAPS updates the community intelligence for the company, which may or may not change its CAPS rating. For more information, visit the Help tab at the top of the page.

Ticker Not Ratable

DSL doesn't currently meet the $100M market cap / $1.50 stock price minimum. (Learn More)

What the Community Thinks

Total Members

91 Outperforms
407 Underperforms
 

All-Stars

20 Outperforms
231 Underperforms
 

Wall Street

1 Outperforms
1 Underperforms
 

Members bullish on DSL are also bullish on:

Members bearish on DSL are also bearish on:

Ticker Tags

Loans (101), Small Cap (1922), Savings & Loans (182)
Suggest a tag

Downey Financial Corp. At A Glance

Current Price: $1.96
Last Trade Time: 7/24/2008 2:42 PM
Open: $2.61
Previous Close: $2.73
Daily Range: $1.93 - $2.61
52-Week Range: $1.06 - $63.17
Volume: 2,574,652
Market Cap: $76.04M
P/E Ratio: 6.53
Compare Our Special Broker Offers!

Stock Trends

DSL VS S&P 500 (SPY)

DSL 12 month chart vs. S&P

News & Discussion Boards

Other News Headlines for DSL

More Headlines...

Top Bull Pitch

Recs

3

Downey Financial Corp. (DSL)

Avatar nonpareilCS (< 20) Submitted: 6/14/07 12:24 AM

Undervalued. Subprime fallout will not affect DSL like originally speculated. Large portion of the float was sold short. Possible takover target for a larger bank wanting exposure in CA and AZ.

Replies: 2 | Reply | Permalink

Top Bear Pitch

Recs

4

Downey Financial Corp. (DSL)

Avatar EMG114 (90.11) Submitted: 5/18/08 7:17 PM

This company provides financial services and it's also related to real estate industry. Because of this, it is expected this stock to go down since there were directly affected by the economic slowdown. They also reported losses on loans as of April (a $247.7 million first-quarter), reduced dividend...More

Replies: 0 | Reply | Permalink

CAPS Members

picks per page. CHANGE

Results 1 - 5 of 59 :   1 2 3 4 5 Next » Jump to page:

Show Pitch Replies

Recs

1

 (DSL)

Avatar masokotanga (98.94) Submitted: 7/18/08 4:33 PM : Underperform Start Price: $3.10 DSL Score: 37.62

I'm hoping to get one last puff out of this cigar butt.

Report this Post Replies: 0 | Reply | Permalink

Recs

0

 (DSL)

Avatar Lordrobot (47.27) Submitted: 7/18/08 3:50 PM : Outperform Start Price: $3.01 DSL Score: -35.11

What people don't understand about this company is that the loans in a california market are not in that much jeopardy. DSL's portfolio is not bad stuff overall. This compnay will survive. I think it is an ideal buyout prospect. I think it is way oversold. The shorts outnumbered the float. That pretty much says it all about the kind of unseemly manupulation that the financials have endured. Finally the SEC woke up and realized that their was something wrong with the naked shorts. Thus the news media if you could really refer to the financial press as news, it more pumped up propaganda than anything else, works in concert with the hedge players on the short side. I think it is pretty obvious by now that the SEC, the Fed and Treasury are not going to allow companies to be driven down by by these hedge fund short seller manupulators. Bank closues everyone loses.





I like finanicals becasue that is the backbone of what this country does best, capital formation. We don't make that much stuff and we aren't supposed to; we are are global owners as it were. The dollar may be down but it remains the go to global currencly. I admit that the Fed and SEC and Treasury have been asleep at the wheel over this. But the key problem is not bad loans but the packaging of mortgage bonds and the idot leverage that was allowed at every level but especially the hedge funds.





DSL got slammed again today and I was buying. The short sellers are going at some point to have to cover and because the float is so low this think will spring off the bottom like a flea. California is a unique market because so few people are homeowners. So when the inventory stairs steps down, there are buyers. The ability for a savings and loan to created new earnings off of write downs is pretty good in that market.

Report this Post Replies: 1 | Reply | Permalink

Recs

0

 (DSL)

Avatar kdakota630 (99.55) Submitted: 7/18/08 10:57 AM : Underperform Start Price: $3.44 DSL Score: 43.36

My guess is that this is the next bank to fail after IndyMac.

Report this Post Replies: 0 | Reply | Permalink

Recs

2

 (DSL)

Avatar anchak (87.61) Submitted: 7/18/08 10:47 AM : Underperform Start Price: $3.21 DSL Score: 39.60

I had to go thru some hoops with the Fool to ensure this was rateable today.

There is one Positive fact : They had a $62 MM capital injection from their PARENT. Not outside - however it adds to their capital ratios. However I think the picture is grim - strangely they have suddenly discontinued their monthly filing of their performance metrics.

Here's my orginal thesis on Downey.

Additions today 6/18/2008
____________________

Downey as I estimated ( based on their recent 8K filings - showing growth in NPAs) will probably end up at around 20% of assets. That about 2.5BN+ in NPAs..... about $500 MM short fron Net tangible Capital +LLR ( ie Texas ration>100%).

Depending on what % age of Loss computation you use Downey needs about $500MM-$1 BN additional capital

------------------------------


This is my initial pitch...when I last picked Downey on 5/27/2008


Downey in my view could be the most important bellweather stock.Why? For one they are a plain vanilla Consumer Mortgage Loan company. Their entire asset book of $10BN+ comprises of Residential real estate loans primarily in California with biggest exposure to LA and San Diego.

I will not detail too much on the Bear side initially....lets see if there's anything positive

Bull ( Not exactly - we are talking about last straws here)
______________________________________________________

(1) They have a relatively high Loan Loss Reserve - well why would that be positive , well in their case may very well act like a lifevest and maintain bouyancy. Its 5%+ of assets - and that's a lot for a pure residential portfolio. Notice that they have about 12% NPA ( of which about 8% is ture - rest are performing TDRs)..... also like about $200M in OREOs .....Net net I think about 15%-20 real $&%* stuff - by their acceleration count for 2008.

Assuming a 40-50% default rate ie incidence of people on whom you'll actually recognise a loss not just non-accrual and a LGD ( Loss given default - ie final disposition of 40%-50% ( Look at the rising trend also there).....


Appx Math Net Loss = 20%*50%*50% = 5% of TOTAL assets

Thus my logic says they'll up their Loss Reserves as the performance degrades - however, if these number hold in the ballpark - they'll have interest income from both their performing assets (80%) and their Modifications (TDRs) ...but bottomline will be abysmal.

The charge recognition shows that they are not in denial and trying to do something about it.

(2) TDRs: 0.5 BN in modifications and growing...this is good , if done right ...essentially is breathing space...works from the borrower as well as lender perspective.





BEAR
______________

(1) There's a very simple one : They have done the riskiest product possible. Neg-Am, Interest Only Option ARMS - a lot of it , it seems. $6BN with possibly >10% underwater valuation. Just this, if they had to take a Mark-to-Market would probably be enough to wipe them out. However, they are not required as long as the cash keeps coming in.

(2) Hence their life-line is on the Liability side. $1BN of FHLB advance maturing this year - they have to roll this over - I do not think they are in a position to repay. They can barely service the interest. And obviously their depositors also have to keep faith.

(3) There are also a myriad of other factors - Huge Monoline exposure ( FGIC and RMIC) - about $500MM as well as high OREO book ($200MM) - which they have to Mark-to-Market and if it keeps growing , they'll bleed more and more.

If by some govt intervention or something they survive, a lot will tell. If they go down - then the blokes with construction exposure - have had it.

Report this Post Replies: 0 | Reply | Permalink

Recs

0

 (DSL)

Avatar luvb2b (99.98) Submitted: 7/18/08 9:06 AM : Underperform Start Price: $4.07 DSL Score: 51.94

Can't believe this is going to give me a chance to reshort.

Report this Post Replies: 1 | Reply | Permalink

Results 1 - 5 of 59 :   1 2 3 4 5 Next » Jump to page:

Wall Street

Results 1 - 2 of 2  

picks per page. CHANGE Expand All Pitches

Top
Pick		Member NameMember RatingStart
Date		CallTime FrameStart
Price		Stock
Gain		S&P
Gain		ScorePitch
TrackBrandes < 20 12/31/07 12/31/07 Outperform NS $30.74-93.49%-13.69%-79.80 Toggle the visibility of 60-Second Pitch and replies
TrackJimCramer 81.64 11/16/07 11/16/07 Underperform 3W $29.64-93.25%-13.44%+79.81

Results 1 - 2 of 2  

X

Beat this Stock

Clicking "Beat this Stock!" will bring you to a company with a higher rating than the one you're currently viewing.

Even though CAPS shows only one- to five-star rankings, behind the scenes, all companies in CAPS have a distinct numerical ranking. In other words, there is a No. 1 stock in CAPS and a worst-ranked stock in CAPS. When you arrive at the top-ranked stock, clicking "Beat this Stock!" will cause the page to refresh.

That is, until there is a new No. 1 stock!

These companies do not represent formal Motley Fool recommendations. Please do your own due diligence before investing. Fool on.

Featured Broker Partners