George Soros (Trades, Portfolio) increased his stake in Synaptics (SYNA, Financial)Â elevenfold, adding an additional 180,000 shares in the company to his portfolio during the second quarter. Since the trade Synaptics' market price has tumbled by an estimated 15%.
Synaptics has a market cap of $2.03 billion, a price-earnings (P/E) ratio of 30.71, an enterprise value of $1.91 billion and a price-book (P/B) ratio of 2.88.
Synaptics is a leading worldwide developer and supplier of customer-designed human interface product solutions that enable people to interact more easily and intuitively with a wide variety of mobile computing, communications, entertainment and other electronic devices. The company generates revenue from the markets for smartphones, tablets, personal computer (PC) products, primarily notebook computers, and other select electronic devices, including devices in automobiles, with customized human interface solutions.
The company’s products include Clearpad, ClearView, TouchView, Natural ID, TouchPad, SecurePad, ClickPad, ForcePad and other products that include dual pointing solutions, TouchStyk and TouchButtons.
Synaptics was founded in 1986 by Federico Faggin and Carver Mean to research neural networks, inspiring the company’s human-interface mission.
GuruFocus also gives the company a 7 of 10 financial strength rating with a cash-debt ratio of 1.50, equity-asset ratio of 0.54 and a Piotroski F-Score of 7 indicating a healthy business situation. The company also has a 9 of 10 profitability and growth rating with an operating margin of 4.51%, an ROE of 9.58% and revenue growth (three years) of 31.40%.
According to GuruFocus, Synaptics has a 4.5-star predictability rating based on backtesting results. Stocks with 4.5-star predictability ratings produce, on average, 10.6% yearly returns over a 10-year sample size.
Soros may have decided to increase his stake because Synaptics is an established company with 30 years of experience. The company's market price has tumbled considerably and is trading at a significant discount toits trading price on May 25, 2015 –Â $98.34. Soros likely believes Synaptics is trading below its intrinsic value because the company has multiple streams of income and a broad portfolio of products.
Based on discounted cash flow GuruFocus gives Synaptics an intrinsic value of $168.19 which gives Soros a healthy margin of safety with his investment.
It is also noteworthy that gurus Joel Greenblatt (Trades, Portfolio), and David Dreman (Trades, Portfolio) both added to their stakes in Synaptics during the second quarter. Gurus Jim Simons (Trades, Portfolio), and Paul Tudor Jones (Trades, Portfolio) both purchased stakes in the company.
Disclosure:Â Author does not own any shares in this company.
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