Trade-Ideas: Synaptics (SYNA) Is Today's

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 Synaptics ( SYNA) as a "barbarian at the gate" (strong stocks crossing above resistance 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 $30.5 million.
  • SYNA has traded 572,678 shares today.
  • SYNA traded in a range 232.8% of the normal price range with a price range of $2.48.
  • SYNA traded above its daily resistance level (quality: 531 days, meaning that the stock is crossing a resistance level set by the last 531 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock s movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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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, Japan, and the United States. SYNA has a PE ratio of 14.9. Currently there are 8 analysts that rate Synaptics a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Synaptics has been 706,400 shares per day over the past 30 days. Synaptics has a market cap of $1.4 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.75 and a short float of 22.3% with 9.05 days to cover. Shares are up 43.8% year to date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Synaptics as a buy. 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, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • SYNA's very impressive revenue growth greatly exceeded the industry average of 0.8%. Since the same quarter one year prior, revenues leaped by 67.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • SYNA's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.37, which clearly demonstrates the ability to cover short-term cash needs.
  • SYNAPTICS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SYNAPTICS INC increased its bottom line by earning $2.87 versus $1.59 in the prior year. This year, the market expects an improvement in earnings ($3.87 versus $2.87).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Computers & Peripherals industry. The net income increased by 268.4% when compared to the same quarter one year prior, rising from $12.30 million to $45.32 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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