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$$$MR. MARKET$$$ Loves GRMN
by: mr_market63 (43/M)
Long-Term Sentiment: Strong Buy 05/23/03 11:52 am
Msg: 2183 of 2716
I bought GRMN today at 45.91. I will sell it at 53.11 in 4 to 6 weeks. Here’s why I like GRMN:
You know when you’re driving in the car and your wife keeps telling you to stop and ask for directions? She’s going, “nyaaa nyaaa nyaaa nyaaa” like a drill into your eye socket and you’re getting more and more lost and you feel like a LOSER LOSER LOSER?? How would you like to snap your fingers and have a map show up on your handheld PDA?
The company makes digital navigation products that use global positioning system, or GPS, technology. GPS provides geographic location data through satellite communications.
The company sells its consumer products through retailers such as Bass Pro Shops, Best Buy and Wal-Mart. Nobody has these things yet, but whenever people actually see others using them, they think that they have GOT TO HAVE ONE! There is HUGE opportunity for growth and these things are showing up in cars everywhere.
The opportunity for market penetration for handhelds today is similar to what it was for cell phones back in the early 90’s.
Obviously competition will want to get their hands on this, like any other electronic gadget. But for now, GRMN is the market leader and it certainly has enough growth packed in to take this stock to my target price.
Meanwhile, sales and earnings continue to rise. The company posted 2002 revenue of $465 million, up 26% from the prior year. Total revenue has doubled in only 3 years. Profit grew 36% to $1.32 a share. First Call analysts see earnings this year rising 12% to $1.48. It will probably be closer to $1.70/share and at today’s P/E of 31, that computes to a stock price of $52.70, my target. Baked into these earnings is a growing depreciation number of about $0.10 which is effectively free cash flow for GRMN.
Estimates for the company have been moving higher, and GRMN has put together an average earnings surprise of more than +15% over the past four quarters. For the second quarter, GRMN expects earnings, excluding effects for foreign currency, at 40 cents to 43 cents with revenue between $138 million and $143 million. GRMN's products are doing well even in this tough environment, and its
track record of success suggests that it will continue to do so in the
future.
GRMN introduced 25 new products in 2001, and an additional 25 new products in 2002. They are not going to watch the grass grow around them, these guys.
GRMN has very little long term debt (3%). Their return on Equity is 27% (vs. Industry average of 8%) and return on Assets is 23%. GRMN’s solid balance sheet has seen their assets grow by almost 50% with virtually no change on the liability side. In the worst case scenario, GRMN would be a very digestable candidate for a takeover, rewarding all shareholders.
Average analyst ratings are between buy and hold which means there is lots of room for analyst upgrades when GRMN beats their number again. This should bump up the stock price considerably.
Here’s what the boss has to say: "We are pleased to announce another quarter of solid growth. Overall demand for our products continues to expand," said Dr. Min Kao, CEO and Co-Chairman of Garmin Ltd. “We also experienced a 56 percent growth in EPS when excluding the effects of foreign currency from the prior year quarter," Dr. Kao continued. "We are pleased that consumers are becoming more aware of the usefulness of GPS navigation. As a result, we have experienced growth in our core markets, as well as our emerging automotive product line, as we look forward to bringing fully-integrated GPS navigation to the PDA market in the coming months."
So go to your Memorial Day barbecue and drink 1000 beers. If you have a Garmin GPS thing in your car, you’ll never get lost.
I am HUGE!!!
$$$MR. MARKET$$$
by: mr_market63 (43/M)
Long-Term Sentiment: Strong Buy 05/23/03 11:52 am
Msg: 2183 of 2716
I bought GRMN today at 45.91. I will sell it at 53.11 in 4 to 6 weeks. Here’s why I like GRMN:
You know when you’re driving in the car and your wife keeps telling you to stop and ask for directions? She’s going, “nyaaa nyaaa nyaaa nyaaa” like a drill into your eye socket and you’re getting more and more lost and you feel like a LOSER LOSER LOSER?? How would you like to snap your fingers and have a map show up on your handheld PDA?
The company makes digital navigation products that use global positioning system, or GPS, technology. GPS provides geographic location data through satellite communications.
The company sells its consumer products through retailers such as Bass Pro Shops, Best Buy and Wal-Mart. Nobody has these things yet, but whenever people actually see others using them, they think that they have GOT TO HAVE ONE! There is HUGE opportunity for growth and these things are showing up in cars everywhere.
The opportunity for market penetration for handhelds today is similar to what it was for cell phones back in the early 90’s.
Obviously competition will want to get their hands on this, like any other electronic gadget. But for now, GRMN is the market leader and it certainly has enough growth packed in to take this stock to my target price.
Meanwhile, sales and earnings continue to rise. The company posted 2002 revenue of $465 million, up 26% from the prior year. Total revenue has doubled in only 3 years. Profit grew 36% to $1.32 a share. First Call analysts see earnings this year rising 12% to $1.48. It will probably be closer to $1.70/share and at today’s P/E of 31, that computes to a stock price of $52.70, my target. Baked into these earnings is a growing depreciation number of about $0.10 which is effectively free cash flow for GRMN.
Estimates for the company have been moving higher, and GRMN has put together an average earnings surprise of more than +15% over the past four quarters. For the second quarter, GRMN expects earnings, excluding effects for foreign currency, at 40 cents to 43 cents with revenue between $138 million and $143 million. GRMN's products are doing well even in this tough environment, and its
track record of success suggests that it will continue to do so in the
future.
GRMN introduced 25 new products in 2001, and an additional 25 new products in 2002. They are not going to watch the grass grow around them, these guys.
GRMN has very little long term debt (3%). Their return on Equity is 27% (vs. Industry average of 8%) and return on Assets is 23%. GRMN’s solid balance sheet has seen their assets grow by almost 50% with virtually no change on the liability side. In the worst case scenario, GRMN would be a very digestable candidate for a takeover, rewarding all shareholders.
Average analyst ratings are between buy and hold which means there is lots of room for analyst upgrades when GRMN beats their number again. This should bump up the stock price considerably.
Here’s what the boss has to say: "We are pleased to announce another quarter of solid growth. Overall demand for our products continues to expand," said Dr. Min Kao, CEO and Co-Chairman of Garmin Ltd. “We also experienced a 56 percent growth in EPS when excluding the effects of foreign currency from the prior year quarter," Dr. Kao continued. "We are pleased that consumers are becoming more aware of the usefulness of GPS navigation. As a result, we have experienced growth in our core markets, as well as our emerging automotive product line, as we look forward to bringing fully-integrated GPS navigation to the PDA market in the coming months."
So go to your Memorial Day barbecue and drink 1000 beers. If you have a Garmin GPS thing in your car, you’ll never get lost.
I am HUGE!!!
$$$MR. MARKET$$$
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