Strong On High Volume: Synnex (SNX)

Trade-Ideas LLC identified Synnex ( SNX) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Synnex as such a stock due to the following factors:

  • SNX has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $26.3 million.
  • SNX has traded 78,333 shares today.
  • SNX is trading at 5.50 times the normal volume for the stock at this time of day.
  • SNX is trading at a new high 4.06% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. 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. 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 SNX:

SYNNEX Corporation provides business process services to resellers, retailers, original equipment manufacturers, and financial and insurance institutions in the United States, North and South America, the Asia-Pacific, Europe, and internationally. The stock currently has a dividend yield of 0.9%. SNX has a PE ratio of 18. Currently there is 1 analyst that rates Synnex a buy, 1 analyst rates it a sell, and 3 rate it a hold.

The average volume for Synnex has been 287,600 shares per day over the past 30 days. Synnex has a market cap of $3.7 billion and is part of the services sector and diversified services industry. The stock has a beta of 1.11 and a short float of 9.5% with 8.09 days to cover. Shares are up 4.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Synnex as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and growth in earnings per share. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • 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.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Electronic Equipment, Instruments & Components industry average. The net income increased by 0.5% when compared to the same quarter one year prior, going from $46.32 million to $46.56 million.
  • The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.21, which illustrates the ability to avoid short-term cash problems.
  • SYNNEX CORP reported flat earnings per share in the most recent quarter. 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, SYNNEX CORP increased its bottom line by earning $5.23 versus $4.58 in the prior year. This year, the market expects an improvement in earnings ($6.04 versus $5.23).

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