We like Synaptics (SYNA) for the following reasons:
- Increasing design wins in mobile fueled by shift away from DDIC towards touch.
- Company is ditching lower margin products and concentrates on higher margin products, as well as cost cutting.
- This is resulting in significant margin improvements, which have already led to very strong earnings growth, despite stagnating revenue.
At first sight, it might seem that the company isn't going anywhere or even backwards. From the earnings deck:
But the guided decline in revenue in Q4 is the result of divesting from its LCD