Synaptics, Inc. (NASDAQ:SYNA)

The touch-screen maker will continue to innovate and be a part of the burgeoning wearable technology trend.

This company design custom human interface solutions to interact with mobile computing, communications and entertainment in China, Japan, Taiwan, Kora, and US. They market: ForcePad, NavPoint, ClearPay, FlaxPad, ClearButtons, Thintouch and TouchButtons. I'm guessing these connect to mobile smartphones and other electronics via their touch screens. I understand they have now added a hover feature which allows to to see certain information when you hover your finger over the screen as opposed to actually touching the screen. This feature is a little tricky to use, but might pay off in the future. This company is based in Santa Clara, CA.

On the financial side:

Insiders 6% well, at least someone there believes in the company.
PEG is a little high at 1.28 and they have a trailing PE of 21.89. Their current EPS is 1.93.
Well, their sales growth is -8.40% and their income Growth = -15.10%
Debt/Equity Ratio is 0.01, which is great. They can concentrate on growing the business, not paying down debt.
They do not pay out a dividend, so hopefully this is a growth company.

On Earnings:
Analysis who follow SYNA believe the company will do well in the next two years. They have raised the earnings from about 0.35/sh to over double to 0.76/sh. That is some estimating. I guess they believe that they will do some outstanding sales and report some great earnings in the next few quarters. In an industry that makes only about 15% growth they have grown about 18.20% and this year alone they should grow at 24.40%. That would be nice if they can meet these expectations.

On Income Statement:
The total Revenue has stagnated holding over 500 million in 2012, 2011 and 2010. So, their gross profit and Net Income shows pretty much level movement these last few years as well. I'm not seeing much historical growth here; perhaps the analysts have some future information that is not reported at this time.

On the Balance Sheet:
Assets have been growing at only about 10% per year if that much. I guess it is a good thing that they haven't started falling with negative earnings. This would appear to be a slow grower.

On Cash Flow:
At least they are able to get a handle on their cash flow. It seems to be increasing slightly more than their sales and income. So, at least they are trying to keep operational expenses under control.

So, investing in this stock might be viewed as a risk play. I'm not convinced that they will provide some strong gains based on their history. But I am intrigued by what the analysts are showing. I'm sure their technology is used in all touch-screen devices, so they are not dependent on any one company. So they have their business established throughout the touch-screen business. So, I believe we will be seeing more of this technology appearing in our everyday lives, and they will be there providing the technology to take us to the future.

I don't have any insider information, but it appears the analysts know something I am missing. I know the communications industry is improving and nearly everyone I know has some kind of hand held device. Perhaps one should take a look at where else their technology can be applied so one can get a better understanding as to how unique these products are.

If I buy this company, I would offer at 38/sh, rethink it if it falls to 35/sh and sell at 55/sh.

Breakout on high volume on 01/25/13

blogs.barrons.com/techtraderdaily/2012/10/25/earnings/

New touch tech should lead to design wins in ultrabooks and mobile devices.

New CEO.

I see this company not just as the TouchPad company, but as a human interface company, and I don't think they are done tinkering with the human interface. Thus, I think there is room for growth.

Innovation = Growth

... and these guys have proven that they are good at it.

Touch screens are the future (I carry more screens around with me than anyone justifiable should). Synaptics uses the best technology that delivers better performance. But tech aside, I see the company building out its ecosystem through PR and marketing efforts. Building the brand will preserve SYNAs stance as a leader, and that's what will drive the stock higher long term.

The pulse of technology

Well, SYNA just can't get any love. Consistently beat earnings estimates, grow earnings YOY, but no love from the market. I own in RL from $23.28, so I am doing OK, but not as well as I would like given what the market has done since I bought and the repeated earning beats (6 out of 7 since I bought). Oh well, I am going to continue to hold here.

-Synaptics, Incorporated (Public, NASDAQ:SYNA)
Analysis 5G. (4.9.2010.)
Stability: ***** (Ultra-stable)
Auditor: KPMG

NOTE: I use my own five star stability rating system, because I don't trust world's rating agencies for my investments. A five star rating means that company is Ultra-stable in my eye, and I would buy a corporate bond from this company at par.

recommended by Michael Robinson from American Wealth Underground, May, 2010.

3-year growth per share:
rev.growth = 30% y/y for last 3 years. Earn.growth = 40% y/y, FCF grew at 80% y/y !!! (per share)
7-year growth per share:
rev.growth = 20% y/y for last 7 years. Earn.growth = 25% y/y, FCF grew at 32% y/y !!! (per share)

P/E=17.5
P/FCF=8.7
P/Sales=1.8
P/B=3.2

Based on P/E, the company's stock *looks* expensive, but this is not so, due to high FCF.
The company is constantly improving upon it's operations, yet the stock price isn't moving anywhere.

The stock is priced above *value* criteria defined by Ben Graham, but I can make a speculative move.
The P/B ratio is a bit high.

If the company's shares fall by 40-50%, I will consider increasing stake.

Good points:
1. Management: buys back shares/stock repurchases
2. Strong competitive moats.
3. China-proof. (they do only R&D, while manufacturing is outsourced.)
4. FCF-on-Assets Ratio (FCFoA) is 25% ! and FCFoE = 40% !
Those parameters are beaten only by few companies such as U.S. "ITT Education" and
Israeli "Roshtov".
5. strong balance sheet
6. good growth

Bad points:
1. Stock Not cheap.
This stock price at $26/share fails Ben Graham's definition of value.

My opinion:
The tablet market is promising. It could be an interesting long-shot speculation.
Stock is not cheap, but reasonably priced.
However this price can be dustified by it's free cash flow.
Basically the company understates own earnings. But FCF shows the truth here.

Verdict: Due to stock price, it does not qualify as an investment, but could be bought in small quantity on speculative basis at $30/share.

3rd party Analysis: Touchscreen chipmakers tap tablet boom
http://www.reuters.com/article/idUSTRE6884HQ20100909

The author, Michael Robinson, thinks it is cheap, and from growth investor standpoint, it really is, but from a value investor's standpoint, such as Graham, it simply isn't.
The author compares this to industrial average, which is absolutely wrong, as the dot.com crash proves. It must be compared to investor's own logic, not to industry average.

-MashkiaTsair, al4321@gmail.com

BBY Focus on touch screen gadgets .

touchscreens

No debt, solid PM/OM....I like it. The big bad world doesn't love you Synaptics, but I wuv you.

Touchpad and touchscreen demand will only increase and quickly. Company has good fundementals and is undervalued right now.

Touchscreen smartphones will continue to gain market share throughout 2010 and 2011, and Synaptics provides the technology for most of the big name phones companies, i.e. RIM, LG, Nokia. Add on the Apple Tablet due out 1st quarter of 2010, which uses Synaptics technology, and there is extreme growth potential over the next few years. With a relatively low P/E, low Price/Cash Flow, and high Short Interest, I predict this stock to soar past its resistance level of 40.46 by 2nd Quarter 2010.

Forward PE only 12. PEG 0.7. Strong balance sheet 192M cash, 64M debt, great industry growth. Down from 40.

Touch screen demand is surging and Synaptics' new technology will lead the way. I look for this stock to grow over the next few years.

Touchpads, touchpads, touchpads!