Synaptics, Inc. (SYNA)

AnomaLee (99.51) Submitted: 7/02/08 2:33 AM : Start Price: $27.31 SYNA Score: -13.18

...because this stock is over-valued right now

Don't get me wrong I love Synaptics and their technology. The penetration of their touch technology and supply deals with Apple are great. it's possible that my call may very well be wrong. However, I bought shares when the price was below $28 and sold off my position above $33. I'm a little worried that the shares may be getting ahead of themselves after gaining 7% in one day.

There is large short interest in the stock which I last checked to be around 40% of float. I believe the recent climb is due to mass short-covering. Although, earnings per share declined by over 45% net cash flow reported a dramatic increase. I believe this was largely due to a large conversion of short-term investments. I did some further glancing before and I remember asking myself "Why is this company involved in auction rate securities?" The management discussion was vague and the adjustment was for $2 million.

To be honest I didn't do enough investigating, but it scared me enough to sale my shares. Anytime I see such a large short position it makes me wonder "What do they know that I don't know?"

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