JHere are today’s updates for Validea Contrarian investor model based on the published strategy of David Dreman. This contrarian strategy finds the most unpopular mid- and large-cap stocks in the market and seeks to improve fundamentals.
FINANCIAL SYNCHRONY (SYF) is a large-cap value stock in the consumer financial services sector. The rating under our David Dreman-based strategy rose from 76% to 83% based on underlying company fundamentals and stock valuation. A score of 80% or higher generally indicates that the strategy has some interest in the stock and a score above 90% generally indicates strong interest.
Company Description: Synchrony Financial is a consumer financial services company. The Company offers a range of credit products through programs it has established with a group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and service providers health. The Company’s revenue activities are managed through three sales platforms: Retail Card, Payment Solutions and CareCredit. It offers its credit products through its subsidiary, Synchrony Bank (the Bank). Through the Bank, it offers a range of deposit products insured by the Federal Deposit Insurance Corporation (FDIC), including certificates of deposit, individual retirement accounts (IRAs), money market accounts and savings. The Company offers three types of credit products: credit cards, commercial credit products and consumer installment loans. The Company also offers a debt cancellation product. It offers two types of credit cards: private label credit cards and dual cards.
The following table summarizes whether the stock meets each of the tests for this strategy. Not all of the criteria in the table below are given the same weight or are independent, but the table provides a brief overview of the stock’s strengths and weaknesses in the context of the strategy’s criteria.
|EPS GROWTH RATES IN THE IMMEDIATE PAST AND FUTURE:||TO FAIL|
|PRICE/CASH FLOW RATIO (P/CF):||PASS|
|PRICE/BOOK VALUE (P/B):||TO FAIL|
|PRICE/DIVIDEND RATIO (P/D):||TO FAIL|
|THE PAYOUT RATIO:||PASS|
|RETURN ON EQUITY:||PASS|
|PROFIT MARGINS BEFORE TAX:||PASS|
Detailed analysis of SYNCHRONY FINANCIAL
About David Drman: Dreman’s Kemper-Dreman High Return Fund was one of the best performing mutual funds of all time, ranking as the best of 255 funds in its peer groups from 1988 to 1998, according to Lipper Analytical Services . By the time Dreman published Contrarian Investment Strategies: The Next Generation, the fund had been ranked number one in more time periods than any of the 3,175 funds in Lipper’s database. In addition to managing money, Dreman is also a longtime Forbes magazine columnist.
About Validea: Validea is an investment research service that tracks the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, Click here
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