A great why to find advantageous companies is to look at those driving key technology market trends and generating good business results when the rest of the market is struggling. This story fits Synaptics, the touch-interface specialists, perfectly.

Synaptics makes human interfaces (mostly touchpads and touchscreens) for a variety of PC and smartphone devices. Big customers include Dell, LG, Ericsson, HTC, and Sony. The company has grown fast, roughly doubling revenue and earnings since 2007, at a time when the economy has been dark, at best. During this time, the stock price has been volatile, but largely flat, and the stock price relative to earnings has gotten cheaper and cheaper.

The company announced earnings yesterday, reporting net income of $19.3 million, or 54 cents a share, compared with $12.4 million, or 34 cents a share, a year ago. Synaptics earned 70 cents a share. Revenue hit $145.8 million, a ries of 27% over last year.  

Interesting post on Themis Trading which I picked up via Zero Hedge on the trading investment in data centers. Equity firms spent $1.8B in data centers last year, wow!

The only problem with this trend? Programmers are getting gypped:

"According to our buddies at the Tabb Group, equity firms spent $1.8 billion last year on data centers; half of that total came from sell-side shops.  But even though they are spending tons of cash on the infrastructure, they are not exactly doling out the cash to  their programmers."

Source: Themis Trading.

Trying to trade or game this market? Be careful, you can get your head ripped off. That being said, I believe the downtrend has now resumed and that the market is currently a downtrending market. 

I expect we'll revisit sub-1,000 on the S&P again -- more likely even sub-900 -- before the federales start fueling up the helicopters for another money drop. I'd buy the market on a 200-point S&P drop Reasons why I remain negative on the market:

Is leadership finally starting to lead? CEOs and corporate executives, who lead our business climate, have been victim of the same cautious and negative thinking as consumers and investors for a long time. But they may finally be emerging from the psychological funk.

The last few quarters have shown a capital-spending led recovery. Companies are sitting on record piles of cash and free-cash flow, and they are finally starting to invest. This is an important trend that show business leaders are finally finding the will to invest.

This would be a huge trend reversal, if it holds. What's interesting about cash and capital spending, as you can see in the chart below, is that it is not a recent trend established in the last recession. Companies have actually been decreasing their capital spending for the last ten years.

Let's face it, the economic engines won't get humming along until executives start getting a little more confident and start building new things, buying equipment, and hiring people. The equipment buying is starting to happen, which hopefully means the jobs are next. Jobs will be where its at. In fact, there is evidence that business leaders are starting to come out of the long slumber.

Bloomberg has a nice article pointing to this topic today.