Synaptics (SYNA) revisited

In the past I talked about Synaptics kind of overreacting to earnings and suggested the stock should probably trade in the low to mid 30s. We're either there or getting there. I think the notebook market has held up pretty well and that's most of their business. Apple's iPod ramp is building off a very low base. Things could start to look better for them. I just thought it was undervalued in the mid-20s. I think it's fairly priced here.

The stock has acted very well and I think it's an attractive acquisition candidate for Logitech (who has the added bonus of a currency benefit doing it), Broadcom, Marvell, Intel... any PC semi that's looking to get into cell phones (which they all are doing) could make a case for getting into touchpads/screens as it's a high growth sector of the somewhat stagnant cell phone market. It's also got a relatively stable notebook business that generates decent cash flow.

There's some legal risk and it's unclear to me whether Apple thinks their touchpad patents trump Synaptics technology. As Apple was a Synaptics customer, then went away, then came back, there's clearly some value Synaptics is adding to their product portfolio.

The chart says relatively emphatically that the $34 level is the gravitational pull in the stock. I'm offering some there.