Saturday, May 31, 2008

Take a look at Garmin


The company is debt free.

The company has over a billion dollars in cash.

It's a leader in the Automotive business
.
It's a leader in the Aviation business.

It's a leader in the Marine business.

It's a leader in the Outdoor Fitness business.

It's return on Invested capital is 39%
.
It sells at 11x earnings, and less than $11 billion market cap.

And GRMN at 48, is down from 120.

Two weeks ago an analyst at Needham downgraded the stock, since it ralled from 40 to 48. He was concerned about consumer headwinds, and "lack of visibility." Deutsche Bank says their "channel checks" indicate excess inventory.

The stock is down from 120 but now the chart shows decent accumulation. None of this analyst poppycock is new news, as there is no value added with their research. All of this is known. The short interest is over 20 million shares, up from 16.5 million just two weeks ago. So if the stock is moving up while the shorts are laying out another 3.5 million shares, and the analysts are staying negative, what would happen to the stock if it did get some good news?

With apologies to "The Who" and the traders who have been just going in and out of this stock, I think Garmin has a squeeze box, and soon the shorts won't be able to sleep at night!

2 comments:

Savvy Suz said...

BRAVO!....Garmin is a great company and has rewarded me well with it's stock in the past!

Palmoni said...

I'm Picking up your "recomendation!"