At Its 52-Week Low, Is Garmin a Buy?

Garmin (GRMN) hit a new 52-week low after indicating its much anticipated new product, Nuvifone, would be delayed. GRMN has aviation, marine, and automobile divisions, and all are affected by the increased price of oil. In addition, GRMN has formidable competition from TomTom (TMOAF.PK) and Magellan. According to Yahoo Finance, about 18% of GRMN's float is being sold short, so there are plenty of people who dislike this stock. At these prices, however, I consider GRMN to be a long-term value play. I bought shares at 36.06 dollars and may average down if shares continue to go lower.

Eric Savitz's Tech Trader blog has the best earnings summary.

If you believe oil prices are preternaturally high, and the U.S. dollar will firm back up, GRMN might have some unexpected upside.

 

Comments

[launiuss]

after coming off it's high of 125 a share i can't believe this company has lost 90 dollars in value in this short time.

2008 Jul 30 06:57 PM

[noni1]

Sorry gus GARMIN is barely worth $10, I bought $100,000 worth of $40 August puts and am already up $20,000

This stock is no better than any other fad stock out there, CROX, HEELEYS, KRISPY KREME, BOSTON CHICKEN. No fad stock lasts forever, and garmens only new product is pushed back until next year. $25 near term, then $10.

2008 Jul 31 12:32 AM

[JimJ]

With phones like Sprint Samsung Instinct selling for $129.99 that have almost as good GPS voice navigation and automatic map updates for life, who is going to buy the Garmin GPS units?? I say Garmin is a long term Short! Sell it on next move up!

2008 Jul 31 12:37 AM

[Chris H.]

Who needs Garmin when you can have an IPHONE. :- )

2008 Jul 31 08:07 AM

[Shorting Should be Banned]

Are you gong to mount your iphone on your windshield?

2008 Jul 31 09:10 AM

[ATLBob]

While I wouldn't necessarily compare GRMN to a fad product, like Heeleys/Crox, they are most certainly selling a commodity item in a competitive market. With no clear way to distinguish themselves with any meaningful competitive advantage, GRMN's 52 week low would appear to be justified.

2008 Jul 31 12:04 PM

[Matthew Rafat]

I sold my GRMN today, on August 5, 2008. I took a slight loss. I had originally intended to average down, but saw better opportunities in WFR and TTWO.

2008 Aug 05 02:53 PM