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Why Stratasys, Crocs, and Synaptics Jumped Today

By Dan Caplinger - Apr 14, 2016 at 6:13PM

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On a flat day for the markets, these stocks posted solid gains. Find out why.

Image: Stratasys.

After the big jump that the stock market has enjoyed during the first part of this week, Thursday's relatively quiet session came as no surprise to veteran market participants. The earliest part of the new earnings season has given investors results that pointed toward sluggish performance in key sectors of the economy, like banking, but most companies have met or exceeded the extremely low expectations that investors had going into the release of first-quarter earnings reports.

Both the Dow and the S&P 500 managed to finish up slightly, but the Nasdaq fell just short of the breakeven mark on the day. Nevertheless, some stocks posted solid gains, and Stratasys (SSYS 5.80%), Crox (CROX 5.37%), and Synaptics (SYNA 3.81%) were among the best performers on Thursday.

Stratasys rose 6% on a strong day for 3D printing stocks, in general, following positive comments from analysts about the prospects of one of the company's main competitors. Merrill Lynch upgraded 3D Systems, and more than doubled its price target on the stock, pointing to its new CEO as likely to drive a successful turnaround for the company.

Even though the analyst firm's comments were directed squarely at its rival, Stratasys has also been making strategic moves of its own in order to try to rebound from a period of falling revenue and substantial losses. As usually happens, the upward movement in the stock price is happening before the fundamentals of Stratasys' business take shape, and the company will need to be successful in order to justify the big rebound that Stratasys shares have already seen so far in 2016.

Crox jumped 8% after investors responded favorably to news of insider buying of the stock. Executive Vice President Daniel Hart filed a notice with the SEC late Wednesday afternoon to report a purchase earlier in the week of 50,000 shares of stock. Those looking at the stock should understand, however, that the purchase was connected with the exercise of stock options, entitling Hart to pay just less than $4 per share for the stock.

Nevertheless, in many similar situations, executives immediately sell the shares they've just received after exercising options. With the move, Hart raised his stake in the shoe maker to more than 300,000 shares, and bullish shareholders hope that the stock will be able to break out of its holding pattern and finally start climbing higher.

Finally, Synaptics was up 7% on the day. Speculation continues that the touch-screen technology specialist might yet receive a buyout offer from a group of Chinese financial institutions and other investors. The company chose not to comment, but reports suggest that Synaptics is trying to negotiate an appropriate price for its shares, but the $110 per-share figure that some believe is likely would represent another 25% increase from where the stock closed Thursday.

Whenever U.S. companies get targeted for acquisition by Chinese buyers, concerns about getting necessary approvals from U.S. regulators is a factor that justifies a discount from the deal price. Yet skeptics point to past deal rumors that haven't yet amounted to anything, and so time will tell whether rumors about Synaptics amount to anything.

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Stocks Mentioned

3D Systems Corporation Stock Quote
3D Systems Corporation
$11.30 (7.01%) $0.74
Stratasys Ltd. Stock Quote
Stratasys Ltd.
$20.23 (5.80%) $1.11
Crocs, Inc. Stock Quote
Crocs, Inc.
$56.14 (5.37%) $2.86
Synaptics Incorporated Stock Quote
Synaptics Incorporated
$148.34 (3.81%) $5.45

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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