GRMN
Garmin Ltd.
TMT, Consumer
05/30/2014
Presented
| Date | 05/28/2014 |
| Price | $58.19 |
| Market Cap | $11.30B |
| Ent Value | $10.03B |
| P/E Ratio | 26.97x |
| Book Value | $17.74 |
| Div Yield | 3.9% |
| Shares O/S | 194.79M |
| Ave Daily Vol | 1,140,000 |
| Short Int | 9.35% |
Current
| Price | $166.84 |
| Market Cap | $32.07B |
| Garmin Ltd., together with its subsidiaries, designs, develops, manufactures, and markets hand-held, portable and fixed-mount global positioning system (GPS) enabled products and other navigation, communication, and information products for the automotive/mobile, outdoor, fitness, marine, and general aviation markets worldwide. It operates in five segments: Auto/Mobile, Aviation, Marine, Outdoor, and Fitness. The Auto/Mobile segment offers a range of automotive navigation products, as well as various products and applications designed for the mobile GPS market. The Aviation segment provides GPS-enabled navigation, VHF communications transmitters/receivers, multi-function displays, electronic flight instrumentation systems, automatic flight control systems, traffic advisory systems and traffic collision avoidance systems, terrain awareness and warning systems, instrument landing system receivers, surveillance products, audio panels, cockpit datalink systems, and others. The Marine segment offers chartplotters and multi-function displays, fish finders, sounders, autopilot systems, radars, instruments, radios, handhelds and wrist-worn devices, and sailing products for use in the recreational marine industry. The Outdoor segment provides outdoor handhelds, wrist-worn devices, golf devices, dog tracking and training/pet obedience devices, and action cameras. The Fitness segment offers training assistants for athletes; personal training systems and pedal-based power meters designed for cyclists; watches designed for swimming pool use; wellness devices; and a Web-based analytic tool that could be used to store, analyze, and share fitness and wellness data of users. The company was founded in 1990 and is based in Schaffhausen, Switzerland. |
Publicly traded companies mentioned herein: Garmin Ltd. (GRMN), Google Inc. (GOOG)
Highlights
The presenter is short shares of Garmin (GRMN), the world leader in GPS navigation, and believes the company faces secular headwinds that could ultimately render portions of its business obsolete. In addition, he sees the potential for GRMN’s method of recognizing deferred revenue (which is shielding margin compression) to catch up with it at some point and materially impact EPS. GRMN’s overall business is declining, and with the exception of the company’s niche Aviation and Marine segments, there is intense competition and a plethora of free smartphone apps that do everything from map consumers’ runs and count estimated calories, to helping track golf shots and navigate traffic (Waze).
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