Saturday, March 3, 2007

Grab Your Garmin

Today I want to take a look at a company that is looking very strong, Garmin. (Symbol GRMN) They reported their quarter a couple of weeks ago and everything looked strong. They are riding the wave of personal navigation devices, which had very strong sales during the Christmas season. They have a popular line of products that includes PND's, aviation, marine, standard handheld GPS's, and products for runners/bikers.

They are reporting huge growth right now. Year over year quarterly revenue growth is 91%, they have nice profit margins at 31%, and have a forward P/E of 16.58. Add to that almost no debt, and a nice level of free cash flow, you've got a winner.

The stock is, however, pretty volatile. An earnings miss could drop the stock five percent in a day. The thing investors are worried about is can they sustain the growth? That answer appears to be yes. So if you hold on during the minor ups and downs, it appears the long term prospects for Garmin are great.

I'd use this pullback in the market to pick up some shares. If it dips below the 200 day moving average, which is right around 50, it looks like a good spot.

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