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    • Garmin: Market Erroneously Pricing In Nuvifone Failure [view article]
      There seems to be quite a bit of mis-informatiion about GRMN within these posts. The net sales numbers for Garmin in 07 are listed on Form 10-k
      (2007 Annual Report) p70

      Automotive/Mobile 73.69%
      Outdoor/Fitness 10.70%
      Aviation 9.30%
      Marine 6.40%

      While I agree with a couple of points made here regarding the Nuvi-Phone I will try and lay to rest a couple other misconceptions:

      1) The cost of Nav on the phone plan is not in Garmin's hands, that will be determined by the carriers who decide to pick up the Nuvi-Phone line within their product offering. This is simply a feature of the phone which does not use the "network time" of the carrier's network, ie; it is occupying space within the spectrum of bandwith and therefore costs the cellular company nothing to offer.

      2) Cell Phone technology, just like GPS technology is very complicated and new entrants to this business will have hurdles to overcome with many Cellular Platforms, ie; tdma & cdma technologies.

      I feel GRMN is making the right move in venturing into new areas. As the margins in the gps industry continue to shrink and competition increases, they will need to stay on the edge of innovation and move into markets not yet explored with a more broad product mix. As I pointed out above, the automotive/mobile segment make up 3/4 of their Net Sales. This is not good news if the margins continue to shrink at present rates if they cannot find other sources
      of profit within other segments of the business.

      Garmin does however have good leadership and I have all confidence that they will find a solution to the shrinking margins. With all this said, I feel they are a great value play at their current level 0f 48.75. Industry P/E ratio is 16, Garmin is trading at 11 times earnings. If you value them as average within the tech sector and assign a P/E of 16, this puts them at 63.75/share.

      Tom Tom announced earning yesterday and their sales were up 70% year over year for the quarter. In news today, Garmin illuded to the fact that sales within the U.S. gps market were up 130% YOY. If that is the case we should see Garmin beat the street estimates of 1.00/share this quarter and I would predict you would see it more along 1.03/share given the decrease in margins.

      I only recently purchased Garmin, but I feel like I stole it at 42.75. In my opinion, the stock is well undervalued. I guess we'll find out on July 30 when this quarter's earnings are announced.       Jul 22 11:02 PM
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