Sysco (SYY) On Momo Momentum Watch Today

Trade-Ideas LLC identified Sysco (SYY) as a momo momentum candidate
By TheStreet Wire ,

Trade-Ideas LLC identified

Sysco

(

SYY

) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Sysco as such a stock due to the following factors:

  • SYY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $161.6 million.
  • SYY has a PE ratio of 37.
  • SYY is currently in the upper 30% of its 1-year range.
  • SYY is in the upper 25% of its 20-day range.
  • SYY is in the upper 35% of its 5-day range.
  • SYY is currently trading above yesterday's high.
  • SYY has experienced a gap between today's open and yesterday's close of 0.8%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

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More details on SYY:

Sysco Corporation, through its subsidiaries, markets and distributes a range of food and related products primarily to the foodservice or food-away-from-home industry. The stock currently has a dividend yield of 3%. SYY has a PE ratio of 37. Currently there is 1 analyst that rates Sysco a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Sysco has been 5.4 million shares per day over the past 30 days. Sysco has a market cap of $22.9 billion and is part of the services sector and wholesale industry. The stock has a beta of 0.42 and a short float of 8.7% with 12.38 days to cover. Shares are up 3.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sysco as a

buy

. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • SYY's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 0.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.99 is somewhat weak and could be cause for future problems.
  • SYSCO CORP's earnings per share declined by 12.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SYSCO CORP reported lower earnings of $1.16 versus $1.58 in the prior year. This year, the market expects an improvement in earnings ($1.94 versus $1.16).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and the Food & Staples Retailing industry average. The net income has decreased by 12.3% when compared to the same quarter one year ago, dropping from $278.81 million to $244.42 million.
  • After a year of stock price fluctuations, the net result is that SYY's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

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