Trade-Ideas: Syntel (SYNT) Is Today's New Lifetime High Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Syntel ( SYNT) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Syntel as such a stock due to the following factors:

  • SYNT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $8.9 million.
  • SYNT has traded 114,468 shares today.
  • SYNT is trading at a new lifetime high.

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More details on SYNT:

Syntel, Inc. provides information technology (IT) and knowledge process outsourcing (KPO) services worldwide. It operates in four segments: Applications Outsourcing, KPO, e-Business, and TeamSourcing. The stock currently has a dividend yield of 0.4%. SYNT has a PE ratio of 17.1. Currently there are 4 analysts that rate Syntel a buy, no analysts rate it a sell, and 6 rate it a hold.

The average volume for Syntel has been 81,800 shares per day over the past 30 days. Syntel has a market cap of $3.3 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.35 and a short float of 2.4% with 3.49 days to cover. Shares are up 49% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Syntel 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, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 15.3%. Since the same quarter one year prior, revenues rose by 13.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • SYNT's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 6.20, which clearly demonstrates the ability to cover short-term cash needs.
  • 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. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • SYNTEL INC has improved earnings per share by 9.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SYNTEL INC increased its bottom line by earning $4.44 versus $2.94 in the prior year. This year, the market expects an improvement in earnings ($4.72 versus $4.44).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the IT Services industry average. The net income increased by 9.5% when compared to the same quarter one year prior, going from $43.39 million to $47.51 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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