This score-card analysis attributes an Overall Score to a company by analyzing several aspects that I consider to be among the most important.
In summary, a company to have an overall score close to 100% must have the following characteristics:
- Report high growth rates in the last 3 years (and in the last quarter) in terms of Revenue, Operating Income and Net Income. Furthermore, it must operate with high and improving margins in recent years.
- Analysts expect Earnings Per Share (EPS) and revenues to grow in the short term (in the next quarter) and in the medium to long term (in the next 5 years). Moreover, they expect the company to be undervalued at current prices and in the last quarter their EPS expectations must have been beaten with a consequent rise in share prices.
- The stock price of the company must have outperformed the S&P 500 index and in the last 3 months the Hedge Funds and Insiders bought shares in the company.
The overall score ranges from 0% (if the characteristics listed above are all very negative) to +100% and it is unlikely that there will be a company with a +100% score because the requirements for achieving this score are very high, however a score higher than +70% can be considered good.
This analysis alone is not enough to decide whether or not to invest in a company because it does not provide indications on the timing of entry, but it is a good starting point.
Synchrony Financial (SYF)
- Overall Score: +68,5%
- Warren Buffett owns over 20 million shares
- Excellent growth in the last quarter
- Revenue +6%
- Net Income +57%
- Excellent growth even in the last 3 years
- Revenue +46%
- Net Income +71% and improved net margin by +17%
- Outperformance compared to the S&P 500 index since the beginning of 2019, but slight underperformance when considering only the last 6 months
- Hedge Funds and Insiders have decreased their positions in the last quarter
- Analysts expect a slight decrease in the next quarter in terms of EPS and Revenue
- YTD performance: +47% (vs. +21% S&P 500 index)
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Synchrony is a consumer financial services company headquartered in Stamford, Connecticut, United States. The company offers consumer financing products, including credit, promotional financing and loyalty programs, installment lending to industries, and FDIC-insured consumer savings products through Synchrony Bank, its wholly owned online bank subsidiary.
The overall score of SYF is 68% .
In the last 6 months, SYF has underperformed the S&P500 index by -0,2% and analysts believe the company is undervalued by 14,9% .
In the last quarter, the company reported revenue of 4981 million, up by 6,1% compared to the same quarter 12 months earlier. Revenue TTM (Trailing-12-Months) are equal to 19381 million, up by 46,5% in the last 3 years.
SYF reported an operating income of 1375 million in the last quarter, an improvement of 54,0% compared to the same quarter 12 months earlier, also reporting an improvement of 45,1% in the operating margin. Considering the sum of the last four quarters (TTM), SYF reports an operating income of 4978,0 Million , a growth of 41,0% compared to three years ago and a reduction of -3,8% in the operating margin.
SYF reported a net income of 1056 million in the last quarter, an improvement of 57,4% compared to the same quarter 12 months earlier, also reporting an improvement of 48,3% in the net margin. The TTM net income is 3799 million , a growth of 71,6% compared to three years ago and the net margin has improved by 17,1% .
In the next quarter, analysts expect decrease in EPS (Earnings Per Share) of -1,8% and a decrease in revenue of -6,0% . Furthermore, they expect an annual growth of SYF EPS by 12,0% for the next 5 years.
In the last quarter, SYF reported better EPS than analysts’ expectations and the stock price reacted by increasing by 0,9% .
Finally, in the last 3 months the Hedge Funds have decreased their positions by 6.2M shares. The Insiders have sold shares worth $120.3k .
This analysis gives you a general idea of whether a company is good or not, but you may also be interested in finding potential entry points, so I am waiting for you here to know about the best chart patterns of today.
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Sources & additional info
*The comparison with the S&P 500 index is visible inside the graph.
*Data updated to the last quarterly report available
*Data in Millions of Dollars
*Data from zacks.com, tipranks.com, reuters.com, finance.yahoo.com
*Company information from wikipedia.com
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DISCLAIMER: The information in this blog post represents my own analysis/opinions and does not contain a recommendation for any particular security or investment.