Use access key #2 to skip to page content.

MagicDiligence (< 20)

Garmin: Growth at a Resonable Price?

Recs

3

May 13, 2008 – Comments (4) | RELATED TICKERS: GRMN , AAPL , NOK

Garmin is the dominant player in the fast growing GPS market. The company has delivered nearly 50% annual earnings growth since 2003, and is expected to grow at 17% per year going forward. With it's current 11 P/E, is Garmin a textbook example of growth at a reasonable price?

http://www.magicdiligence.com/articles/garmin-GRMN-stock-pitch

4 Comments – Post Your Own

#1) On May 13, 2008 at 8:47 AM, leohaas (36.25) wrote:

I like Garmin myself (I have a thumbs-up in CAPS, and a real-life position). I agree that the company looks attractively priced right now. But you are not mentioning competition.

First, Garmin is only dominant here in the north American market. In Europe, TomTom is the dominant player. Second, there is always the risk of cheaper competitors taking market share. As a result, prices of GPS devices are going down fast. That means margins are going down. 

Report this comment
#2) On May 13, 2008 at 10:30 AM, griderX (95.54) wrote:

I've also been looking at it in RL investing...however, like leohaas wrote, margins are bound to shrink to the low 20's to high teens.  BTW, who is going to purchase a $600 GPS?!?!  I actually plan on purchasing a Garmin GPS within a month but in the $200 range....where the price cuts have been very good for the consumer.

Report this comment
#3) On May 13, 2008 at 10:35 AM, griderX (95.54) wrote:

Just did a quick check...back in 09/06 Net Margins were 30.14% now 03/08 they are 22.26% still very respectable....but just curious to know where the bottom is...that's why this stock was hammered!

Report this comment
#4) On May 13, 2008 at 10:46 AM, griderX (95.54) wrote:

Just did a quick check...back in 09/06 Net Margins were 30.14% now 03/08 they are 22.26% still very respectable....but just curious to know where the bottom is...that's why this stock was hammered!

Report this comment

Featured Broker Partners


Advertisement