Synaptics (SYNA, Financial), a developer of human interface (HMI) hardware and software, has continued its strategicshift to higher margin business, primarily Internet of Things (IoT) products. As we’ve followed management’s strategic shift towards higher-margin markets, we note that the company’s return on invested capital (ROIC) has steadily risen from around 8.5% in 2019 to the mid teens for the 12 months ending 12/31/2021.3 While we believe the recent and expected performance of the company are positives, valuation has become a concern and we are trimming our position.
From Steven Scruggs (Trades, Portfolio)' FPA Queens Road Small Cap Value Fund fourth-quarter 2021 commentary.
