Synchrony Financial (SYF) Flagged As A Storm The Castle Stock

Trade-Ideas LLC identified Synchrony Financial (SYF) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Synchrony Financial

(

SYF

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified Synchrony Financial as such a stock due to the following factors:

  • SYF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $247.8 million.
  • SYF has traded 8.2 million shares today.
  • SYF is trading at 5.11 times the normal volume for the stock at this time of day.
  • SYF crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on SYF:

Synchrony Financial operates as a consumer financial services company in the United States. SYF has a PE ratio of 12. Currently there are 9 analysts that rate Synchrony Financial a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Synchrony Financial has been 2.9 million shares per day over the past 30 days. Synchrony Financial has a market cap of $25.6 billion and is part of the financial sector and financial services industry. Shares are up 5.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Synchrony Financial as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and notable return on equity. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 5.4%. Since the same quarter one year prior, revenues slightly increased by 8.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
  • SYNCHRONY FINANCIAL's earnings per share improvement from the most recent quarter was slightly positive. This year, the market expects an improvement in earnings ($2.64 versus $1.87).
  • The gross profit margin for SYNCHRONY FINANCIAL is currently lower than what is desirable, coming in at 30.18%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 16.51% is above that of the industry average.

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