Topeka Analyst Makes Case For Himax On Recent Weakness

In a note released Wednesday, Topeka analyst Suji De Silva made the case for buying Himax Technologies HIMX amid weakness due to potential acquisition of Renesas by Synaptics.

Looking at the transaction, De Silva notes that the deal is yet to be confirmed. Moreover, he believes the street has overreacted as to the effect this could have on Himax.

De Silva acknowledged the Renesas SP Driver business likely has good display technology. However, he does not see it as being as well developed in global multi-market customer relations as Himax, which he is calling the "market leader."

De Silva commented, "we believe HIMX benefits from a more robust and diversified display technology product portfolio that point product competitive vendors will have difficulty competing with longer-term."

Furthermore, De Silva sees the reported value of the potential transaction as placing a "significant premium" on Renesas compared to the larger more diversified Himax.

De Silva concluded, "We reiterate our Buy on HIMX and would use current weakness to add to positions."

Shares of Himax Technologies are trading up over four percent at $6.89 in Wednesday's session.