Friday, June 29, 2007

CapitalSource Inc.

CapitalSource Inc. is a high-yielding company with a forward-looking price to earnings ratio of just 8.28 times next year’s projected earnings. With a recent ticker price of $25.10, CapitalSource Inc. is ready for significant appreciation. The company’s operating profit margin is an impressive 58.69%. This results in an annual operating cash flow of $279.0M.

CapitalSource Inc. is a cash cow that has a reasonably attractive valuation. With a beta of 1.33, the company is more risky than the stock market as a whole. This information is useful, but a more careful analysis of CapitalSource Inc. reveals that the company’s risk profile is not as volatile as many of its competitors. It’s important to invest in a sufficiently liquid stock that money can be taken out of the position on every trading day and CapitalSource Inc.’s total market capitalization of $4.751B is ample proof of such liquidity.

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