) hit a new 52-week high of $39.43 on Dec 18, eventually closing
at $39.42. The shares have been particularly buoyant in recent
times, jumping 10.4% over the past one month. The closing share
price also represents a decent one-year return of 23.2% and a
year-to-date return of 22.1%.
The price increase was supported by a significant rise in share
volume. Average volume of shares traded over the last 10 days
(1,040k) increased substantially from the 610k average volume of
shares traded over the last three months.
This price appreciation can be attributed to the deployment of
its Design Compiler Graphical products for Samsung mobile system
on chips (SoCs). The Design Compiler Graphical is intended to
reduce power consumption and provide more competitive SoCs for
the mobile market.
It is also worth noting that the share price has been increasing
continuously since the company reported fourth-quarter results on
Dec 4. Synopsys delivered mixed fiscal fourth-quarter 2013
results, with earnings beating the Zacks Consensus Estimate but
revenues missing the same. Moreover, both top and bottom lines
compared favorably on a year-over-year basis. The year-over-year
increase was primarily attributed to revenues from backlog.
Its collaboration with ARM to optimize the performance of its
processors was another positive for the company. Alliances have
helped the company strengthen its product portfolio and improved
the design of its custom integrated circuits, which in turn
We are positive that the company's recent product launches,
acquisitions and deal wins will boost results, going forward.
Moreover, the unique intellectual properties and global support
provided by Synopsys will likely drive forthcoming results. The
company has a good cash reserve that is necessary for funding
However, competition from
) and Ansys Inc. coupled with a challenging technology spending
environment and uncertainty regarding proper time to realize
acquisition synergies keep us on the sidelines.
Currently, Synopsys holds a Zacks Rank #3 (Hold). A better-ranked
stock in the technology sector is
Micron Technology Inc.
), with a Zacks Rank #1 (Strong Buy).
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