NIA has good reason to believe that Synacor (SYNC) will today begin its HUGE rally back to $10-$11 per share before 3Q results and between $12.96 and $15 per share the day after 3Q results. SYNC's 3Q results are due to be released during the 3rd week of this month. Countless wealthy investors are following SYNC from the sidelines, waiting for it to finally show signs of a major breakout. As soon as they see SYNC up 5% intraday on any given trading day, they will rush into SYNC causing it to finish that day up 10% to 20%, followed by an even larger 20% to 30% gain the following day, in NIA's opinion.
SYNC's supply and demand will dramatically change starting today vs. the last two weeks. SYNC's lock-up expiration resistance is gone and has been gone for weeks, but SYNC was held down the past two weeks by window dressing. The last two weeks were the final two weeks of the 3Q. Because SYNC made a large temporary dip last quarter due to its lock-up expiration, major fund managers and other institutions that owned SYNC engaged in the well-known popular practice of "window dressing". Meaning, they slowly sold off their SYNC shares in the final two weeks of the quarter so that when their investors receive their quarterly statements, they don't see SYNC listed as a holding.
At the end of every quarter, fund managers sell stocks that declined big that quarter and buy stocks that were up big that quarter. They want their investors to think that they were smart enough to invest into the best performing stocks of the quarter while avoiding the worst performing stocks. SYNC ended the 2Q at $13.70 up 55% from NIA's suggestion just two months earlier at $8.84. SYNC declined 45% in the 3Q to finish at $7.58 per share due to its lock-up expiration and no fundamental reason. Even though NIA is 100% sure that SYNC is about to make a move back to $13.70 and onto much higher levels in the 4Q, no fund managers wanted to have SYNC listed as a position at the end of the 3Q. Therefore, many fund managers sold their SYNC shares over these past 2 weeks.
Not only did window dressing create artificial supply of SYNC shares these past couple of weeks, which held SYNC down at extremely undervalued levels, but the same principle caused funds who are bullish on SYNC to delay their purchases. Many fund managers that want to accumulate SYNC before their upcoming huge 3Q results announcement that NIA believes will likely far surpass expectations, purposely held off their purchases until this week.
Most institutions that are planning to take HUGE positions in SYNC will start aggressively buying SYNC shares by the end of this week, in NIA's opinion. NIA expects to see major institutional SYNC purchases this week and if we see SYNC up just 5% intraday on Monday, Tuesday, or Wednesday, it could easily turn into a 2-day rally back to at least $9, and possibly as high as $10 or $11. If SYNC doesn't reach $10 or $11 this week, we are sure it will over the next 2-3 weeks prior to 3Q results.
NIA predicts that major institutional buying will take place in SYNC this week. By holding off their purchases until this week, these funds will avoid having a 3Q loser listed as one of their end of the quarter holdings, but are set to have one of the biggest winners of the 4Q listed as one of their year-end holdings. NIA expects this week's major institutional buying in SYNC to continue for the following 2 weeks up until 3Q results.
After SYNC potentially blows away 3Q expectations and issues extremely strong 4Q guidance, SYNC's institutional buying could pick up steam big time. In fact, SYNC's institutional buying this week will probably trend higher each week for the rest of 2012, with SYNC's biggest institutional buying occurring the final two weeks of the year as fund managers once again engage in window dressing, but this time by jumping on the bandwagon and loading up with SYNC so that it is listed as one of their largest year-end holdings.
Fund managers will be eager to make themselves look good by creating the appearance that they profited from SYNC's huge 4Q rally ahead of America's HUGE upcoming 2013 TV Everywhere boom. History will forever look back at the year 2013 as the year in which television was profoundly changed by the mainstream adoption of TV Everywhere.
Not only will demand for SYNC shares dramatically increase early this week, but supply of SYNC shares will simultaneously make a dramatic decline. Instead of seeing constant selling pressure that prevents SYNC from breaking out above $8, the selling pressure of last week will be replaced this week with constant buying pressure that pushes SYNC up rapidly to $9, $10, and possibly even $11 per share. No SYNC shareholders in their right mind would even consider selling their shares in the single digits, with the 2012 online holiday shopping boom getting ready to fuel the largest ever increase in display ad RPMs for online media companies like SYNC with web portals that receive tens of millions of unique users and billions of ad impressions each month.
Expectations for SYNC are as low as can be after their 3Q revenue guidance issued on July 25th of $28-$28.5 million, when analysts originally estimated that SYNC's 3Q revenues would be $30.5 million. SYNC is down 41.5% since then, even though SYNC maintained the same full year revenue guidance of $123-$126 million due to their expectations of a record breaking 4Q. Analysts now estimate SYNC's 3Q revenues to be $28.34 million, down 8% from 2Q revenues of $30.81 million.
After SYNC released guidance on July 25th, the stock fell 30% the next day to $9.11, but then bounced back up to $10.88 on August 6th. It is obvious that SYNC was extremely oversold at $9.11 and if SYNC just meets estimates of $28.34 million, it will finish October around $10.88. SYNC at its current price of $7.58 in NIA's opinion is the most artificially low stock in the market today. NIA believes there is absolutely no doubt that SYNC will quickly bounce back to $9.11 per share in the days ahead, where it closed on July 26th after falling 30% to extremely oversold levels, for a quick and easy gain of 20% from its current price of $7.58.
SYNC at $7.58 is like free money. NIA sees almost no chance of SYNC missing analyst estimates for the 3Q of $28.34 million, but NIA believes in the extremely unlikely event SYNC did miss 3Q estimates and reported revenues of around $27.5 million, it would still finish October at a minimum of $9.11 per share for a gain of 20% from its current price of $7.58. NIA sees SYNC as the only stock in the market that has both astronomical upside potential, along with almost no downside risk whatsoever. SYNC's risk/reward ratio for the next 30 days is probably the most positive risk/reward ratio that NIA has ever seen for any stock in over a decade.
With compete.com showing SYNC's Charter, Centurylink, Suddenlink, Atlantic Broadband, Mediacom, Windstream, Consolidated, North State, Hawaiian Telecom, TDS, and Truvista portals as all having received record unique visitors in the month of August, there is a chance that SYNC's 3Q revenues could surpass 2Q revenues of $30.81 million. Compete.com estimates that these portals saw a total of 13,932,743 unique users in the month of August, up 9.7% from their average monthly combined unique users in the 2Q of 12,698,010. This represents about 70% of SYNC's total average monthly unique users of 20 million.
With SYNC's main portals that account for approximately 70% of their monthly unique users seeing traffic growth in August of nearly 10% above the 2Q, NIA sees no chance of SYNC's 3Q results disappointing Wall Street and an excellent chance that SYNC's 3Q results will positively shock Wall Street (possibly more than any other U.S. publicly traded company this earnings season). NIA is not going to officially predict that SYNC's 3Q revenues will surpass 2Q revenues of $30.81 million, because we are very conservative and will be very happy as long as SYNC beats average analyst estimates of $28.34 million. In the event that SYNC's 3Q revenues did shockingly surpass their 2Q revenues of $30.81 million, NIA believes SYNC could potentially skyrocket to a new 52-week high above $18 by the end of this month (for a single month gain of over 137%)!
NIA was proven right about SYNC doubling from its initial May 2nd suggestion price of $8.84 per share, when it skyrocketed to $18 in July for a gain of 104% in a little over two months. NIA sees no downside risk for SYNC below its initial profile price of $8.84. If NIA wasn't 100% sure that SYNC will once again double in the short-term from its artificially low prices of recent weeks, NIA would have sold its SYNC position and invested back into gold stocks.
SYNC is the only stock in the market today that in our opinion is better than gold, because SYNC appears to have won gold by reaching 25 million pay-TV subscribers with their TV Everywhere authentication technology for the recent London Olympic Games. SYNC made it possible for the subscribers of nearly 40 pay-TV companies to authenticate their pay-TV subscription in order to access live streaming and pre-recorded videos of every Olympic sporting event from any location, on any broadband connected device, at any time. Just the fact that SYNC excluded the Olympics from their 3Q guidance should tell anybody with common sense that SYNC could be set for a huge 3Q earnings surprise.
The Olympics broke just about all TV Everywhere records and had nearly 10 million total authenticated devices, with SYNC authenticating a large amount of them. If you look at a chart of SYNC's traffic for just about any one of their main TV Everywhere portals, SYNC's portal traffic soared through the roof on the exact dates of the London Olympic Games. SYNC's management was clearly not expecting this, and NIA now believes that SYNC will rebound back to a minimum of $12.96 per share this month (for a quick gain of 71% from its current price of $7.58 per share).
NIA is not an investment advisor and is not making any target prices or financial projections. Never invest based on anything NIA says. Always do your own research and make your own investment decisions. NIA never recommends to buy or sell any stock.
Disclaimer: NIA currently owns 486,035 shares of SYNC. NIA intends to sell these shares in the future and can do so at any time. NIA reserves the right to add to its SYNC position at any time.
NIA is not an investment advisor. This email is not a solicitation or recommendation to buy, sell, or hold securities. Never make investment decisions based on anything NIA says. This email is meant for informational and educational purposes only and does not provide investment advice.
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