NEW DIRECTIONAL CALL PLAYS
Synaptics Inc. - SYNA - close: 91.88 change: +1.24
Stop Loss: 87.65
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Time Frame: 8 to 12 weeks
New Positions: Yes, see below
Why We Like It:
"We are the leading developer of human interface solutions which enhance the user experience in the expanding digital lifestyle. We were founded in 1986 by Federico Faggin and Carver Mead and over the last 26 years we have grown from a neural network research organization into the leading human interface solutions partner of a global customer base. Simply put, our next-generation interfaces set users free to interact with devices in ways the world couldn't have imagined a decade ago." (source: SYNA website)
SYNA has over 500 patents or patent pending for technology. Over one billion devices have an interface designed by Synaptics.
The company recently purchased Renesas SP Drivers, who happens to be the only supplier of touchscreen chips to Apple Inc. (AAPL). SYNA believes this acquisition will boost the company's market by +50%.
SYNA also purchased Validity Sensors late last year. Fingerprint sensors on your devices is a growing trend and Validity is a major player in the fingerprint ID solutions. Some estimates suggest we could see fingerprint sensors on more than 500 million devices in the next two years.
This could fuel widespread adoption of fingerprint sensors for a number of security and payment applications, especially on mobile devices. SYNA's new fingerprint sensors could end up on Apple's phones, Android phones, and Windows phones.
SYNA raised its guidance the same day it announced the acquisition of Renesas. SYNA boosted its Q4 revenue guidance to the $300-310 million range, up from $275-295 million. The company raised its full year 2014 revenue guidance to $933-943 million, up from $918.5.
Wall Street seems to like SYNA's acquisitions. Combining SYNA's technology with Renesas' technology could make SYNA a dominant player in the smartphone, tablet, touchscreen technology space. It could also boost SYNA's margins as they combine the solutions together into one product.
The acquisition and the raised guidance sparked a wave of analysts upgrades for shares of SYNA.
SYNA spent about two weeks consolidating its mid-June rally higher. Now SYNA appears to be breaking out to new highs. Today's intraday high was $92.19. We are suggesting a trigger to buy calls at $92.35.
Trigger @ $92.35
- Suggested Positions -
Buy the Sep $95 call (SYNA140920C95) current ask $6.70
Option Format: symbol-year-month-day-call-strike
Entry on July -- at $---.--
Average Daily Volume = 1.45 million
Listed on July 01, 2014