Hit hard recently, this stock has bounced back and may be the perfect value financial for a growth portfolio. Synchrony Financial (NYSE: SYF) is one of the nation’s premier consumer financial services companies. It is the self-described largest provider of private label credit cards in the United States, based on purchase volume and receivables. It provides a range of credit products through programs established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and health care service providers to help generate growth for the company’s partners and offer financial flexibility.
The Jefferies team has noted in the past that private label cards are gaining share, and their research suggests a continuation of that trend. They also note that retailers continue to push back on rates, and private label cards offer more of a symbiotic relationship for retailers. The analysts also believe that Synchrony offers the potential for solid capital returns after the spin-out from General Electric.
The company’s recently announced capital plan came in at 60%, slightly higher than the 58% the analysts expected, with a lower dividend and higher share buyback. They believe this is a solid catalyst and trading at just 10 times 2017 earnings estimates, the stock looks cheap.
The $35 Jefferies price target is in line with the consensus estimate of $35.19 per share. Shares closed most recently at $27.31.
This company is down a stunning 31% since last August. VMware Inc. (NYSE: VMW) provides virtualization infrastructure solutions in the United States and internationally. The company’s virtualization infrastructure solutions include a suite of products designed to deliver a software-defined data center run on industry-standard desktop computers and servers, and support a range of operating system and application environments, as well as networking and storage infrastructures. Its solutions enable organizations to aggregate multiple servers, storage infrastructure and networks together into shared pools of capacity.
Of course the big issue is how the stock will trade going forward as a result of the Dell deal with EMC, which was a concern even before the deal surfaced. Some have said in the past that they feel that VMware will continue to trade at a discount to intrinsic value because of the overhang. While Jefferies acknowledges the continuing overhang risk, the firm also feels that business is surprisingly resilient and that the company continues to sign deals. Jefferies also a sees a huge $1.2 billion share buyback as a positive as it will drastically reduce the float.
Jefferies has a whopping $83 price target. The consensus target is $63.26, and the stock closed Friday at $59.18.
All these stocks are more suited for aggressive growth accounts. They all could have some serious upside, and trading where they are now, the downside on all four looks to be more limited.