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Cramer's Mad Money Highlights: Synaptics

Synaptics CEO Michael Hurlston tells Jim Cramer that the keys to Synaptics’ success lie in diversification, acquisitions and looking ahead to new workplace trends.

When a company can hike its gross margins while diversifying and modernizing its technology, investors take notice. That’s the story of Synaptics,  (SYNA) , the touch interface maker with shares up 419% over the past two years.

In a recent "Executive Decision" segment on his Mad Money, Jim Cramer spoke with Michael Hurlston, president and CEO of Synaptics, based in San Jose, Calif.

Hurlston described how the company spun away from its reliance on mobile products into more PCs and IoT (Internet of Things) devices. Mobile products accounted for 63% of sales two years ago, but only 25% today.

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Meanwhile, IoT devices now make up 25% of sales. Hurlston credits this diversification with improving gross margins. Margins had historically been pegged at 38%, he said, but now are hovering near 55%.

Hurlston was also bullish on two recent acquisitions, which have added biometrics and fingerprint recognition to the product portfolio. Synaptics shares are up more than 12% over the past month. The stock’s up more than 60% so far this year.

Synaptics is now well positioned for the "hoteling" trend where employees can use any work station, as opposed to the cubicle concept. Now one docking station can securely serve multiple employees in an intelligent office where IoT devices help create an entirely new workscape.

IoT devices, ranging from booking systems for conference rooms to smart thermostats, all wirelessly connect to the network, reducing the amount of human input needed.