SYNA - Valens Credit Report - 2023 05 30
Credit markets are overstating SYNA's credit risk with a YTW of 7.409% relative to an Intrinsic YTW of 5.469% and an Intrinsic CDS of 180bps. Furthermore, Moody's is overstating SYNA's fundamental credit risk with its speculative Ba2 credit rating three notches below Valens' IG4+ (Baa1) credit rating.Incentives Dictate Behavior™ analysis highlights mostly negative signals for credit holders. That said, as a positive, although most management members are not material owners of SYNA equity relative to their annual compensation, CEO Hurlston's significant equity ownership indicates he may be able to convince other NEOs to align with shareholders to pursue long-term value creation.
Earnings Call Forensics™ of SYNA's Q3 2023 (05/03/2023) call highlights that management generated an excitement marker when saying days of sales outstanding were reduced by five days over the last quarter.
Synaptics is a developer and supplier of custom-designed human interface semiconductor product solutions that enable people to interact with a variety of mobile computing, communications, entertainment, and other electronic devices. The company targets the markets for smartphones, tablets, personal computer, products, Internet of Things, products and other select electronic devices, including devices in automobiles. The company's family of products includes: ClearPad?, ClearView?, TouchView?, Natural ID?, TouchPad?, SecurePad?, ClickPad?, ForcePad?, AudioSmart?, VideoSmart?, ImagingSmart?, and other product solutions.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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