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Synaptics Inc. (SYNA) has a Very Bullish Chaikin Power Gauge stock rating and triggered an Oversold Buy signal in Chaikin Analytics based on last week’s dip. Coming on the heels of a Momentum Breakout Buy signal with the stock at new 52-week highs, this pullback is a good opportunity to buy SYNA in anticipation of news highs in the $110 – 120 area.
Synaptics is a computer and mobile maker of peripherals with a particular expertise in touchscreen and fingerprint technology. Human interface technology is a rapidly expanding market and SYNA has bulked up its offerings in this area through recent acquisitions. The company derives more than 80% of its revenues from mobile products, but that is about to change with the late July introduction of Microsoft’s Windows 10 operating system for PCs.
Windows 10 supports biometric (fingerprint) authentication and following Apple’s lead in the iPhone 6, biometric solutions are expected to replace password authentication in both mobile and PC devices. 51% of respondents in Cowen and Company’s 2015 IT spending survey expect to adopt Windows 10 within the next year, which will support the 90% of respondents who expect to deploy biometric user authentication.
The growing reliance on mobile payments from a variety of device makers will be facilitated by biometric authentication, and SYNA made a well-timed strategic acquisition of Validity Sensors, facilitating its entry into this rapidly growing market.
Synaptics reported better than expected 3rd quarter earnings in late April but guided inline, which triggered profit taking from the $90 level down to a low of $85.13. SYNA, which had been outperforming the broad market since late January with very strong Chaikin Money Flow readings, picked up Wall Street support after the announcement of the late July launch date for Windows 10. The Chaikin Power Gauge stock rating turned Bullish in early May, based on recommendations from firms like Needham & Co and Cowen and Company.
Cowen analyst Robert Stone reiterated his outperform rating recently and raised his price target for SYNA to $115. Synaptics introduced very innovative SmartBar technology at the Computex trade show, which adds a touch input to the space bar and other keys on the computer keyboard. These innovations along with their strong market share of the touch display and the impending growth of biometric authentication make Synaptics an attractive technology investment.
Wall Street is looking for $4.88 per share in fiscal 2015, which will be reported in late July up from $3.67 in 2014 and is expecting a jump in earnings of 28% in 2016 to $6.25.
Synaptics Inc. has a Very Bullish Chaikin Power Gauge stock rating. This rating is driven by Very Bullish Earnings trends, strong Technicals, and improving analysts estimates and opinions for SYNA. The strength in the semiconductor group, driven in part by merger activity is also a positive input to the Very Bullish Power Gauge rating. While SYNA has a large short position, this is actually a positive given some exciting new product introductions, as it represents future demand for the shares if Synaptics continues to make new highs.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
