Synchrony Financial (NYSE:SYF)’s stock trades at less than 8x current and normal earnings. As we look at the impact on normal earnings from the loss of its Wal-Mart account, we feel that it is much closer to zero than to the recent move in the stock. We also think that as one contemplates how dire this account loss is in terms of signaling a huge increase in the competitive environment for private label cards we should keep in mind that this loss follows shortly on the heels of the company’s win of the PayPal account. With the ability to buy back 10% of its market cap in the next twelve months we feel that Synchrony is well positioned to take advantage of any extended weakness in its stock price.
From Hotchkis & Wiley's third-quarter 2018 shareholder letter.
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