SYNAPTICS INC

38.04 -0.39 (-1.01%) Buy

SYNA investors herd to book profits while the going is good

13 min read

SYNAPTICS INC delivered massive losses on Thursday. It returned -1.01% to close at 38.04. On a day when the overall market breadth was 35%, it closed higher than 73% of the market. In comparison, the benchmark SP500 index closed today at -0.0002%.

[Themes containing SYNA]

Buy-and-Hold investors in SYNA experienced a maximum drawdown of -28.69% over the last three months. It returned -16.73% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +8.58%.

Trend

SYNA has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 9 days, SYNA underperformed the SP500 index on 51% days.

During the last three months SYNA was mostly loss making and delivered on average -0.25% per day. It's best return during this period (of +5.85%) was on Monday, 3 Dec, 2018. While it's worst loss in the same period (of -8.21%) was on Monday, 12 Nov, 2018. There was initially a bullish trend during this period which started on 17 Sep, 2018 and went on till 20 Sep, 2018. The bullish trend returned +3.43% to investors. This was followed by a bearish trend that started on 4 Oct, 2018 and ended on 10 Oct, 2018. This bearish trend lost -17.17% of investor capital.

On monthly basis, SYNA delivered losses in more months over the last year, than profits. SYNA delivered profits less regularly than SP500 index. SYNA significantly outperformed SP500 index in Jun 2018, when it returned +19.81% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. SYNA had a longer winning streak of losing months than SP500 index. It went down in 4 straight months (from Jul 2018 to Oct 2018) during which period it delivered -24.91%. It is interesting to note that both SYNA and SP500 index significantly outperform during months when quarterly/annual results are announced.

Investment philosophy is the clear understanding that by owning shares of stocks he owns businesses, not pieces of paper.
-- Warren Edward Buffett

SYNA is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in SYNA's volatility from 19 Sep, 2018 to 13 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that SYNA has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

Investors trading in SYNA derivatives at this moment can consider 'Long Straddle' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than SYNA. Therefore, SP500 must receive a lower allocation than SYNA in your portfolio. SP500 index usually has shorter drawdown period than SYNA.

Based on your interest in SYNA you may find it interesting to know that LULU and TWTR are both mid caps that have shown remarkable performance and deserve to be on every investors' watchlist.

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