Investors are always hunting for the next hot stock - the dream stock whose price increases multi-fold when the market finally discovers it. It's easy to look back and discover the 10 best stocks of the past decade. However, a successful investor is the one who is able to evaluate and identify tomorrow's greatest companies before it gets too late and risky.Synovus Financial Corp. (NYSE: SNV) was hit hard by the subprime mortgage crisis as the company struggled to manage its bad real-estate loans. Though southeast regional bank is still trying to recover from the financial crisis that struck two years back, it has certainly survived the recession- disappointing many naysayers. The firm has reported a net loss for the past six consecutive quarters, and may report loss in upcoming quarter as well.
However, that's not the end of the story. The bank officials are confident of return to profitability in fourth-quarter 2010, helped by improving credit trends. The company's efforts were evident in the most recent quarter as well as it managed to significantly trim its loss. Synovus recorded a net loss $249.9 million and a loss per share of 54 cents for the fourth quarter of 2009, compared with a net loss of $634 million and a loss per share of $1.93 in the fourth quarter of 2008. “We expect to come out of this critical period stronger than we’ve ever been, and a leading mid-size Southeastern regional bank that will be able to be a consolidator ourselves." CEO, Richard Anthony stated recently.
The bank is pursuing several capital initiatives and sees potential for recovery of deferred tax asset valuation allowance in 2010. Credit costs already appear to have peaked while new problem loans and chargeoffs have fallen. Meanwhile, the non-performing assets are being written off their books. Moreover, the company's loan loss provision is set to fall as well. The firm has already done a remarkable job in cutting the cost of operations and curbing expenses.
Meanwhile, the bank is poised to benefit from diminished competition as a number of banks in the south-east region are going out of business or being taken over by FDIC. The bank is also poised to benefit from a sustained recovery in housing market.
The bank recently declared a 1 cent per share dividend, a move which is expected to further enhance investor's confidence.
The Columbus, Georgia-based bank is also widely seen as a potential takeover target.
In terms of stock performance, shares of the company have gained nearly 57% this year. Four of the 22 analysts covering the company have it rated as a Strong Buy. Of the remaining eighteen analysts, one is at Moderate Buy, twelve are at Hold, one tags it at Moderate Sell while four rate it at Strong Sell.
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