Thursday, April 7, 2011

Synaptics Incorporated (NASDAQ: SYNA) Q2 2011 Price Target

Recent price: 25.14$
P/E Ratio: 13.71
3 Months Target Price: 32$

Company Description
According to data provided by Reuters, Synaptics Incorporated is a worldwide developer and supplier of custom-designed user interface solutions that enable people to interact and intuitively with a variety of mobile computing, communications, entertainment and other electronic devices. The Company targets the personal computer (PC) market and the market for digital lifestyle products, including mobile smartphones and feature phones, portable digital music and video players, and other select electronic device markets with its customized human interface solutions. Its original equipment manufacturer (OEM) customers include tier one PC OEMs. The Company supplies custom designed human interface solutions to its OEM customers through their contract manufacturers.

Confidence Margins
Strong resistance $33.33 (+33%)
Light resistance $32.24 (+28%)
Light support $23.82 (-5%)
Strong support $21 (-16%)

This company has been trading down on a continued selling pressure since issuing quarterly statements en January 20th. Synaptics Incorporated saw more than it's fair share of analyst downgrades since then. The company presents good value at these levels, and it will be interesting to acquire a position and hold it for the coming quarter.

Entry strategy
For the cautious investor:
Buy the stock for 26$ or less.

For the risk-taking trader:
The September 2011 26$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 275$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 32$. It is highly recommended to keep the position on check if it goes sour.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 32$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

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