SYNNEX Corporation (NYSE:SNX) — The name of this company may lead a person to believe it to be a pharmaceutical company, with its main product being a new allergy relief drug. Instead this company is in the top 10 stocks receiving earnings estimate revision activity in the Business Software Service/BPO sub-sector.
In fact, it is one of the largest IT product distributors in the world. Zack’s reports that over the past month, current quarter consensus estimates on a fiscal year (Nov.) have risen from $1.93 to $2.09 per share. Current FY earnings per share estimates have risen from $6.22 to $6.49. And Standard & Poor’s, on Sept. 27, raised their 12-month target to $120 from $100.
SNX reported fiscal Q3 earnings of $1.73, 18 cents above Capital IQ consensus, and estimates that SNX will achieve FY 2017 earnings of $6.90, up from its current estimate of $6.18.
Technically, SNX stock is in a powerful bull trend. In early October, the stock jumped to a 17-month high, and in the run opened a gap from $107 to $113 before hitting a high at just below $119.
The gap up and new high coincided with its surprising FQ3 results (above).
A pullback fueled by profit-taking closed the gap and drove it under its 50-day moving average at $106.50 — all on lower-than-average volume. Since high-momentum stocks, like Synnex Corporation, often gap up to new highs before a pullback, they offer buyers an excellent opportunity to position a future winner. Thus try to buy SNX stock at about $104 for a short-term trade to $118 for a proposed gain of 13.5% by Dec. 31.