Why Synaptics, Incorporated Shares Soared

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Synaptics, Incorporated (NASDAQ: SYNA  ) jumped more than 12% during intraday trading Friday, then settled to close up around 6% thanks to an analyst upgrade following mixed fiscal second quarter results.

So what: Quarterly net revenue jumped 44% year-over-year to $205.8 million, which translated to adjusted net income growth of 62% to $0.86 per share. By contrast, analysts were modeling adjusted earnings of $0.89 per share on sales of $201.51 million.

However, thanks in part to incremental revenue from Synaptics' new Fingerprint ID business -- the acquisition of which is now expected to be accretive to earnings by the end of the fiscal year -- the company stated revenue in the current quarter should be in the range of $180 million to $200 million. Analysts, on average, were only expecting sales of $183.66 million.

The performance and outlook was good enough to earn the respect of analysts at Feltl, who upgraded shares of Synaptics from "Hold" to "Buy" and assigned a $68 price target. 

Now what: We generally take most analyst movements with a grain of salt, but I'll admit shares of Synaptics look reasonably priced at around 15 times next year's estimated earnings. Keeping in mind those estimates are likely to increase once everyone' has time to fully digest today's news, I think the stock could very well continue to reward patient long-term investors.

Consider 9 incredible stocks in this free report
While Synaptics has chosen to use much of its cash to repurchase shares, some investors would rather see it pay a dividend.

But can you blame them? One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2809174, ~/Articles/ArticleHandler.aspx, 9/16/2014 7:41:11 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement