A Stock You Can Bank On
|Written by GSCR Staff|
|Friday, 04 January 2013 06:48|
By virtually all accounts, the Street consensus is that bank M&A activity could be extremely robust this year. So, why not highlight one of them, right? And what better stock to highlight that one that just happened to reach a 52-week high yesterday and is a real M&A candidate.
With a market cap approaching $2 billion, Synovus Financial Corporation (NYSE – SNV - $2.57) is no small company. That is a big advantage as its size, standing, approach and business model make it a real target for mid-large size banks. Fortunately for us, it is also a small cap stock.
Synovus is a well-regarded southeast regional financial services company with $26 billion in assets based in Columbus, Georgia. Synovus’ divisions provide commercial and retail banking, investment, and mortgage services to customers through 30 locally branded divisions, 293 offices, and more than 300 ATMs in Georgia, Alabama, South Carolina, Florida, and Tennessee.
Synovus is one of the most widely followed and heavily traded stocks in its peer group. Synovus has nearly 20 analysts following it and the stock trades over 2 million shares daily. Moreover, the Company enjoys major institutional ownership to the tune of 70% of the outstanding shares.
The Company is expected to release its 4Q12 results on January 22nd, and while revenue is expected to decline by 10% with limited profitability, the Street is estimating that EPS will jump to $0.14 in 2013. The 52-week high for the stock is $2.64 and we believe that as M&A activity in the space occur, SNV will be a part of the discussion and ride the wave. On a fundamental business basis, one could argue that the Company has underperformed a bit. Yet, given its size, model and attractive regional market, we could see a buyout of this bank well north of the $3.00 mark.
Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.
This Market Monitor blog was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports.
It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.
The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.
This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.
ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.
For more information, visit our Disclaimer: www.goldmanresearch.com
Leave your comments