Synaptics (SYNA) Showing Signs Of Being Water-Logged And Getting Wetter
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
Trade-Ideas LLC identified
(
) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Synaptics as such a stock due to the following factors:
- SYNA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $56.6 million.
- SYNA has traded 277,549 shares today.
- SYNA traded in a range 227.5% of the normal price range with a price range of $4.11.
- SYNA traded below its daily resistance level (quality: 9 days, meaning that the stock is crossing a resistance level set by the last 9 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.
EXCLUSIVE OFFER: Get the inside scoop on opportunities in SYNA with the Ticky from Trade-Ideas. See the FREE profile for SYNA NOW at Trade-Ideas
More details on SYNA:
Synaptics Incorporated develops, markets, and sells custom-designed human interface solutions for electronic devices and products primarily in China, South Korea, Taiwan, the United States, Japan, and other countries. SYNA has a PE ratio of 86.0. Currently there are 8 analysts that rate Synaptics a buy, no analysts rate it a sell, and 1 rates it a hold.
The average volume for Synaptics has been 860,500 shares per day over the past 30 days. Synaptics has a market cap of $3.1 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.46 and a short float of 14.4% with 6.82 days to cover. Shares are up 24.9% year-to-date as of the close of trading on Friday.
Analysis:
rates Synaptics as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
Highlights from the ratings report include:
- SYNA's very impressive revenue growth greatly exceeded the industry average of 10.7%. Since the same quarter one year prior, revenues leaped by 125.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, SYNA has a quick ratio of 1.68, which demonstrates the ability of the company to cover short-term liquidity needs.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 28.50% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- SYNAPTICS INC has improved earnings per share by 8.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SYNAPTICS INC reported lower earnings of $1.25 versus $2.87 in the prior year. This year, the market expects an improvement in earnings ($5.76 versus $1.25).
- 37.09% is the gross profit margin for SYNAPTICS INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, SYNA's net profit margin of 4.30% is significantly lower than the industry average.
- You can view the full Synaptics Ratings Report.
null