This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Cheap Bank Stocks With a Strong Earnings Future

1. Doral Financial

Shares of Doral Financial (DRL) of San Juan, Puerto Rico, closed at $1.47 Monday, returning 54% year-to-date, following a 31% decline during 2011. The 12-month return for the shares has been 27%.

Doral's shares are heavily discounted, trading for just three times the consensus 2013 EPS estimate of 49 cents, and for half their tangible book value.

Doral had $1.9 billion in total assets as of Dec. 30 and reported fourth-quarter net income attributable to common shareholders of $9.2 million, or seven cents a share, compared to a loss of $38.5 million, or 30 cents a share, in the fourth quarter of 2010. The fourth-quarter profit included an $8.6 million income tax benefit.

The company's credit costs declined during the fourth quarter, but Doral was still saddled with nonperforming assets making up 9.62% of total assets as of Dec. 30, improving slightly from 9.86% a year earlier.

When asked during the company's fourth-quarter conference call how much in remaining deferred tax assets investors might look forward to recapturing, Doral CFO Bob Wahlman said that the DTA recapture was related to the performance of two of the company's Puerto Rico subsidiaries, which under the territory's law, file their tax returns independently. Depending on the performance of these subsidiaries, there may be additional tax benefit's boosting Doral's bottom line, but the CFO couldn't provide an estimate.

B. Riley analyst Joe Gladue rates Doral a "Buy," with a $3.75 price target, and said on Jan. 23 that the deferred tax valuation allowance "could add roughly $2.78 to tangible book value if it can be taken back onto the balance sheet," and that the company "took a big step forward" during the fourth quarter, and that if and when the company reaches its goal of sustained profitability, "should not only boost tangible book value, but the stock multiple as well."

Interested in more on Doral Financial? See TheStreet Ratings' report card for this stock.

>>To see these stocks in action, visit the 5 Cheap Bank Stocks With a Strong Earnings Future portfolio on Stockpickr.

-- Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here: Philip van Doorn.

To follow the writer on Twitter, go to
Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
6 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $17.44 -0.17%
C $54.08 -0.18%
COF $79.04 0.52%
DRL $0.11 0.00%
JPM $66.86 0.12%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs