The S&P 500 lost 0.1%, or 2.99 points, to close at 3,892.09, but the Dow Jones Industrial Average gained 0.5% or 112.94 points, to close at 33,530.35. A chunk of those gains came Friday on the back of the labor and service sector numbers. This brings me to Saratoga Investment (NYSE:SAR), which is well positioned to benefit from the current market environment.
Saratoga Investment is a business development company that invests in companies that specialize in middle-market companies. At present, SAR has $955 million in assets under management, which is up from $839 million at the end of last year. It provides capital in the form of loans and equity Investment. The company has a diverse portfolio of Investment across various industries, including technology, healthcare, and consumer services.
Amazon.com, Inc. recently came out of a massive, multi-year Investment cycle spurred by newfound demand for ecommerce and cloud services. This has been a huge boon for SAR, as the company has been able to take advantage of the opportunities presented by Amazon’s growth. Additionally, SAR has also been able to capitalize on the recent surge in the tech sector, with many of its Investment in technology companies.
Another Investment opportunity for Saratoga is the renewable energy tax credit (RETC). “All the buzz around it makes investors feel like, OK, maybe this is a good opportunity and something to get involved in,” Ryan Myers, senior vice president of services for Stonehenge Capital, said bringing new investors into RETCs has been a big part of their business.
A close #2 is the December services PMI report. This report is important for investors to stay on top of, as it provides an insight into the current state of the services sector, and what their strategies are is important before committing your Investment dollars.
This brings me to Synchrony Financial (NYSE:SYF), which as shown below has been one of the biggest beneficiaries of the recent surge in the tech sector. Synchrony is a well-respected consumer financial services company that provides credit cards, personal loans, and auto loans to its customers.
SYF has been able to capitalize on the surge in demand for digital payments, as well as the increasing popularity of digital banking. The company has invested heavily in technology and innovation to make sure it is at the forefront of the digital payments revolution.
The company’s stock has been on a tear lately, with the stock price rising from around $20 at the beginning of the year to over $60 currently. That’s a lofty multiple and adds risk to the Investment case. Short sellers are sniffing around. Perhaps the biggest issue for me is that the company is still relatively small, with a market cap of just $21 billion.
Despite these risk, I believe SYF is well positioned to benefit from the current market environment. The company has a strong balance sheet, a well-respected management team, and a proven track record of delivering strong returns. Additionally, the company’s technology and innovation are second to none, when it has achieved this level of innovation, Investment, and popularity.
To get an even better understanding of the current state of the company, I recommend checking out the Motley Fool’s podcast, where they recently interviewed Synchrony’s CEO, Brian Doubles. During his interview, he discussed the company’s strategies and how they are positioned for future growth.
Joining me today, Motley Fool's Chief Investment Officer, Andy Cross. During the podcast, Andy discussed the current state of the markets, what he’s seeing in the markets, and why he believes SYF is a good Investment. He noted that the company’s stock has appreciated significantly since the beginning of the year, going from a price-to-earnings multiple around 10 times the beginning of 2022 to now around 16 to 17 times earnings, which is a substantial increase.
Andy also noted that the company has a strong balance sheet, with cash and cash equivalents of over $2 billion, as well as a strong dividend yield of 4.9%. He also discussed the company’s ability to take advantage of the digital payments revolution, as well as its ability to capitalize on the growth of the tech sector.
Overall, I believe Synchrony Financial is a good Investment opportunity for investors looking for exposure to the digital payments revolution. Despite the risk associated with the stock, I believe the company’s strong balance sheet, innovative strategies, and growth potential make it an attractive Investment.
For those interested in learning more about the company, I recommend visiting Synchrony’s website, where they provide detailed information about the company, its products, and its services. Additionally, investors can also contact customer service @ 1-800-775-4662 customerservice@inman.com.
