Sunday, February 2, 2014

"Sometimes a stock comes along that has technologies that are just "scary" cool. Put that together with impressive financial numbers and you will find the stock of Synaptics Inc. (SYNA) "

Dow Jones Industrial Average 15,698.85 (Down) Week ending 01-31-2014

First, you had human to human interaction. Then M2M machine communications, (a business that I was in for 19 years!). Now you have the new frontiers of human to machine communications and interaction. Sometimes you only need to be nearby, (Near Field Communications) to interact. Sometimes it is a touch or a gesture to communicate.

Enter Synaptics (Symbol SYNA, $58.36). Sometimes I talk about a stock and it may go down in that week. The stocks I pick out for this blog are purchased with a 1 year to 3 year opportunity window in mind. I am not a day trader. 

Synaptics describes the company on their website as follows:

Our Company

We are the leading developer of human interface solutions which enhance the user experience in the expanding digital lifestyle. We were founded in 1986 by Federico Faggin and Carver Mead and over the last 26 years we have grown from a neural network research organization into the leading human interface solutions partner of a global customer base. Simply put, our next-generation interfaces set users free to interact with devices in ways the world couldn’t have imagined a decade ago.
Our combination of technology, expertise, innovation, comprehensive and customized solutions (from prototyping to module design to manufacturing to testing), and exceptional customer support makes us the right choice for partners that want to differentiate in the market.
  • We have more than 1,900 unique capacitive touch solutions in the market
  • We have close to 400 patents issued or pending
Over one billion devices include Synaptics interfaces. Shouldn’t yours?
Now to take a look at the numbers. SYNA
The company currently has a PEG ratio of 0.0692 and a ROE of 26.54%. (Stats are from Y-Charts).  I should note here that be careful with the stats that you make your purchasing decisions on when doing your homework. You can go to four different websites and they may all give you a different number for the same stat. Use multiple websites for reference. 

Revenues for the company this year are $822 Million dollars so this is a small cap stock. Revenue year over year growth has been running 43.85%. Wall Street is in love with revenue growth right now because they think that most earnings are being engineered by buybacks of company stock.

Synaptics Inc. has a great balance sheet with a Current Ratio of 3.8. (3.8 Assets to every 1 part liability), with a current PE of 15.24. The company has Gross Profit Margins of 45.95%.

Earnings for 2014 are looking like $3.70 per share and looking out into 2015 are projecting at $4.11 per share, (Stats from CBSMarketwatch) , with a forward PE of 14.19. The last quarter Year over Year, (YOY), earnings change was 62%.

The One year stock gain for the Trailing Twelve Months, (TTM), is 66.36%. The Investor's Business Daily's current EPS rating is 92. (I would have liked that as a grade in high school.)

 Here is the link for Near Field Communications. Really Cool. Near Field Technology Demo Link . It shows how amazing this technology is.

 Multi-Touch Interfacing
The Analyst have 10 buy recommendations, 1 Overweight, and 2 Hold rankings on the stock. 

There are 34 Million Shares outstanding of the stock. The largest Institutional holder of SYNA stock is BlackRock.

I would say to buy in with small buys into the stock because the price will move around here a bit up and down. Then sit back and relax and put your feet up.


Happy Superbowl - Ground Hog Day here in Pennsylvania. Phil saw his shadow, so 6 more weeks of Winter and another 4-8 inches of snow coming tomorrow. Super Bowl prognostication: Broncos. 


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