×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: Synchrony | credit card | retail | Warren Buffett

Synchrony Jumps as Berkshire Adds Stake in Bet on Retail

Synchrony Jumps as Berkshire Adds Stake in Bet on Retail
(Synchrony Financial)

Tuesday, 15 August 2017 03:40 PM EDT

Synchrony Financial posted the biggest increase in the 67-company S&P 500 Financials Index after Warren Buffett’s Berkshire Hathaway Inc. took a stake in the credit-card company in a bet on the prospects of its retail clients.

Berkshire built a $520 million holding in Synchrony during the second quarter, according to a regulatory filing Monday. The card company has partnerships with retailers including Amazon.com Inc., Wal-Mart Stores Inc. and JC Penney Co. Synchrony makes loans and operates a network to process the payments, making it similar to another Berkshire investment -- American Express Co.

“With AmEx, you’re taking a view of the overall economy and the prime customer, whereas with Synchrony you’re taking a view on retail, and somewhat of a more diversified customer base,” Vincent Caintic, an analyst at Stephens Inc., said in a telephone interview. “If you believe in a recovering retail environment, this would be a good stock to play in.”

Synchrony climbed 3.8 percent to $30.77 at 10:07 a.m. in New York. That pared the stock’s loss for the year to about 15 percent.

Retailers including handbag seller Coach Inc. and Advance Auto Parts Inc. have been facing pressure. The companies slumped Tuesday after issuing forecasts that disappointed analysts.

Home Depot Inc. also dropped, though the company topped profit estimates as sales grew faster than expected. In a bright spot for the broader retail industry, U.S. sales advanced in July by the most this year, with widespread gains from department stores to building materials outlets, according to Commerce Department figures released Tuesday.

Synchrony “should be able to work past their credit issues that they’re facing,” said Caintic, who has a neutral rating on the stock and highlighted Buffett’s long-term view. “It does make me worried about the company over the next year or so. But over the next five years, this company should continue to grow and it should continue to take share.”

© Copyright 2024 Bloomberg News. All rights reserved.


StreetTalk
Synchrony Financial posted the biggest increase in the 67-company S&P 500 Financials Index after Warren Buffett's Berkshire Hathaway Inc. took a stake in the credit-card company in a bet on the prospects of its retail clients.Berkshire built a $520 million holding in...
Synchrony, credit card, retail, Warren Buffett
316
2017-40-15
Tuesday, 15 August 2017 03:40 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved