I thought you might enjoy a quick a look at one of the stock’s I’ve been buying. So here’s a brief Synovus Financial Corp (NYSE:SNV) Stock Analysis.
Synovus Financial Corp Fundamental Analysis: Growth Narrative
Synovus Financial seems to be at something of a turning point. They’ve reduced their operating and credit costs, improving profitability dramatically in the last year. Their non-performing loans are also decreasing sharply each quarter.
Plus, SNV just unveiled how they are repaying their TARP debt last week. And the market is eating up the secondary offering. Since the early earnings release that accompanied the SNV TARP news, the stock of Synovus Financial has risen almost 10%. SNV debt has also been upgraded by Fitch, with a positive outlook. Moody’s recently upgraded SNV, too.
Other than Goldman, analysts have been busy upgrading SNV and (raising the price target to boot).
Improving macro-outlook aside: From a valuation perspective, Synovus looks fairly priced.
SNV stock has just started to trade at a small premium to book value. Generally, I try not to buy anything above book value. But in this case I’m comfortable adding to my position because the price/book has only recently edged above 1. Additionally, SNV appears cheap relative to earnings – with a P/E of just under 4 and PEG ratio of 0.48 (see video above)
As long as the Georgia real estate market holds up, I think the fundamental case for SNV is quite strong. Some have their doubts about this assumption, but for now I’m bullish.
If you’re still not convinced, let’s look at the price action of Synovus Financial Corp…
Technical Analysis of Synovus Financial Corp:
SNV has been showing improved technicals as the year progresses. The stock is in a clear uptrend, and on a shorter term timeframe, has held the recent gap higher – which I highlighted on Twitter a few days ago…
Additionally, on the daily time frame, the longer term moving averages are all nicely lined up – further confirming the bullish trend. The large buy volume on the recent breakout is also encouraging.
Finally, it’s worth mentioning how the price action of SNV is acting constructively. Specifically, there seems to be firm support at 3.25. And though Synovus Financial is over-bought, judging by bollinger band analysis, the character of the price action is healthy. In particular…
Synovus Financial stock is grinding sideways and slightly higher (on very high volume) rather than being violently rejected from prior overhead supply. I think this is the most the bulls can hope for right now – but it can go on for awhile. I also would not be surprised by a bit of a pullback in the days to come, and will be a buyer on dips. Such is my analysis of Synovus Financial.
[update: as of close on July 24 SNV is at 3.35, closing slightly off the highs of day, at new 52 week highs. I view this as constructive.]
What do you think about SNV? Bullish or bearish?