Synovus Financial Corp. (SNV) operates dozens of community banks throughout Georgia, Alabama, Florida, Tennessee, and South Carolina. Concentrating on commercial loans and commercial real estate, the bank uses its small-town image to establish strong relationships with its small-business customers.
The company has been benefiting from increased loan-growth. Over the near-term, improving interest income and credit quality is supporting the company’s financials, while strategic investments in merger & acquisitions will aid growth over the long-term.
SNV’s debt situation looks solid with a debt-to-equity ratio of only 0.2. The company is also highly profitable with a net margin of 25.8%. Earnings have grown an average of 15% per year over the past five years and are expected to soar 352.2% in the current quarter.
The stock appears undervalued with a trailing P/E of 14.88 and a forward P/E of 11.79, which is impressive considering the stock has risen 142.8% over the past year. This is represented in the chart below.
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Take a look at the 1-year chart of SNV below with added notations:
SNV has been on a roll since its July low last year, but the stock recently has been unable to break the $50 resistance level (red), which is also its 52-week high.
A solid close above that $50 mark should lead to much higher prices for SNV.The possible long position on the stock would be on a breakout above that level with a stop placed under it.
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SNV shares were trading at $48.67 per share on Friday morning, down $0.25 (-0.51%). Year-to-date, SNV has gained 51.39%, versus a 12.95% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing.
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