Headwinds At Synaptics Will Be Temporary

Shareholders Unite
Investing Group Leader

Summary

  • The company has made a successful transition towards servicing the IoT market, benefiting from its core capabilities as well as a market secular tailwind.
  • However, progress is being rudely interrupted by a substantial inventory correction, as economies are slowing down and scarcities turn into a glut.
  • This should be over within a couple of quarters, and given the still benign valuation for the shares, we think this is a buying opportunity.
  • The inventory correction could turn worse if the economy enters in a recession, but even if that happens, it's temporary.
  • Looking for more investing ideas like this one? Get them exclusively at SHU Growth Portfolio. Learn More »

Big data connection technology concept.

jamesteohart

Synaptics (NASDAQ:SYNA), which has made a very impressive pivot to the IoT market where now the large majority (68% in Q2) of their revenues are coming from, is experiencing some inventory issues.

But the company also has some

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This article was written by

Shareholders Unite
20.16K Followers

Shareholders Unite is a retired academic with 30+ years of experience in the financial markets. He looks to find small companies with multi-bagger potential while mitigating risks through a portfolio approach.

He runs SHU Growth Portfolio where he offers wide coverage of several small companies with high growth possibilities. He has a buy and hold approach with tranche purchases of stocks of interest. The service features an illustrative portfolio to incorporate into your portfolio, buy alerts, weekend stock and market updates, and a chat room. Learn more

Analyst’s Disclosure:I/we have a beneficial long position in the shares of SYNA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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