SYNC is and HAS BEEN an investment since March, when I first published this research report on the company when it was in the low 7s. It has grown into the largest portfolio position as a result of appreciation. In the March research report, I stated the following:
SYNC is selling at 1.5 times revenues and 15 times projected 2012 earnings. If the projections are correct SYNC should be selling at a minimum of double the current market cap based on the the premium that should be assigned to a growth company in a hot sector that has created a niche for itself that is difficult to replicate. If the guidance is conservative, then the stock should be in the mid-20s by the end of the year.
It seems as though my estimates may have been conservative, all things considered. I didn’t know at that time that volume and interest in the stock would jump to such extraordinary levels.
The onus is now on the company to justify this run by exceeding expectations and raising guidance when they report in a few weeks.
Keep in mind, this was a company that was attempting to go public before 2012. It is also a company that was supposed to start trading publicly above $10 per share but saw its offering price lowered due to prevailing market conditions earlier this year. Point being that management obviously had an idea of what they considered to be fair value. At present value, the company is trading at a 50% premium to what management considered fair value at the beginning of this year, without all of the recent positive developments. Upside remains substantial.
And here is an updated technical look at the company. As a side note, before getting to the chart, I am astounded by the number of individuals who find it so difficult to hold onto a profitable investment. I am also surprised at how many individuals honestly feel that they are adept enough to trade every swing in a stock. Both of these traits guarantee that you miss the bulk of the move in a stock like this. And all you need in order to have a good year is reasonable risk control and one or two of these names per year. Your trading and fear of a profit turning into a loss will kill you.
click chart to enlarge