DFS: Adding Discover to Investing Ideas (Short Side)

01/31/20 03:29PM EST

Hedgeye CEO Keith McCullough is adding Discover (DFS) to the short side of Investing Ideas. Below is a brief note.

Discover (DFS) had a terrible quarter (probably because, unlike some of their peers, they told the truth about the US consumer slowing)...

Here's an important excerpt from Financials analyst Josh Steiner's take on the DFS bad debt cycle:

On the earnings call, while addressing the subject of credit, CFO John Green previewed the company's forthcoming 10-K disclosure on troubled debt restructurings, with credit card TDRs up +$1.1B or +48% y/y to $3.4B as of December 31, 2019. Combining the 2019 and 2018 ending balances, average TDRs for the year were $2.85B - a near tripling of the $1.0B figure in 2016.



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