NEW YORK (TheStreet) -- Shares of Synaptics (SYNA - Get Report) were gaining 11.9% to $72.50 with heavy trading volume on Wednesday following a report that the touchscreen technology maker rejected a takeover bid from an unnamed Chinese investor.
The Chinese investment group reportedly offered to buy Synaptics for $100 a share, valuing the company at almost $4 billion, according to Bloomberg. The offer would have represented a 70% premium over Synaptics' Tuesday closing price.
Synaptics is reportedly uninterested in selling itself at that price, and could be holding out for bids as high as $125 a share, according to Bloomberg. The company is reportedly still in talks with the Chinese investment group.
About 3 million shares of Synaptics were traded by 11:34 a.m. Wednesday, above the company's average trading volume of about 1 million shares a day.
TheStreet Ratings team rates SYNAPTICS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate SYNAPTICS INC (SYNA) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SYNA's very impressive revenue growth greatly exceeded the industry average of 11.5%. Since the same quarter one year prior, revenues leaped by 52.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.31, 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 1.62, which demonstrates the ability of the company to cover short-term liquidity needs.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market on the basis of return on equity, SYNAPTICS INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- SYNAPTICS INC's earnings per share declined by 10.1% 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 increased its bottom line by earning $2.84 versus $1.25 in the prior year. This year, the market expects an improvement in earnings ($6.97 versus $2.84).
- 43.53% is the gross profit margin for SYNAPTICS INC which we consider to be strong. Regardless of SYNA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SYNA's net profit margin of 6.54% is significantly lower than the industry average.
- You can view the full analysis from the report here: SYNA