Synaptics has a golden touch

Synaptics (SYNA), one of guru Howard Lindzon's favorites, was at its 13-day moving averages yesterday. Today, the stock bumped up 3.6% to 44 plus and is trading above its averages. I won't be buying here, but it's tempting.

The fundamentals and growth rates are phenomenal. SYNA's margins aren't salivating: profit margin is at 9.95%, operating margin at 11.3%. But the other numbers sensational.

• Quarterly revenue growth: 63%
• Quarterly earnings growth: 321%
• Total cash: $262 million
• Total debt: $126 million
• Return on equity: 14.1%

In addition, the Co is still young and the shares outstanding (26.2 million shares) and float (23.2 mil) are very low. Short interest of the float is 11.5%.

All these numbers are positive at the very least, and the technology is here to stay as much as any interactive cellphone would be. It's not risk free. It's not sitting on a billion dollars of cash. But it's about to grow into a big, big monster. Don't you love big monsters?

Pupule says: A- grade.

Unfortuantely, at least for today, the stock is up 3.6% to 44 and now well above its 13-day moving averages. I'll wait on SYNA. A good price will come soon enough. Thank you, guru Howard.

Long term, the stock may test the patience of longs. In mid-March, SYNA traded at 23, so it has since almost doubled. Looks quite similar to the chart of Nintendo (NTDOY.PK). That stock doubled between November and May and has since gone sideways. Unlike Nintendo, however, I believe Synaptics has the will and capability to increase production based on demand. Kaaching.

Read more about the Co and CEO Francis Lee:

GigaOM: Mobiles get the Synaptics’ Touch