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Huge 52-Week High Surprise: Garmin (GRMN, GOOG, AAPL, TRMB)
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If you took the developments of the last couple of years with the explosion of smartphones, Garmin Ltd. (NASDAQ: GRMN) might have been easy to consider road kill. Yet here we are at the end of 2011 and Garmin shares have hit a new 52-week high. This almost seems to good to be true. The company has declining sales and its ability to grow sales overall into late-2012 and beyond remains a question for many investors.
Google Inc. (NASDAQ: GOOG) and Apple Inc. (NASDAQ: AAPL) along with their mapping and navigation services for free or nearly free took away the need for many of those in-car dashboard devices for drivers who practically live in their cars and trucks. Trimble Navigation Limited (NASDAQ: TRMB) is not anywhere close to its 52-week high today.
As far as what is driving Garmin, maybe it is the personal navigation devices used for exercise and hiking, as well as the marine and aviation products. Unless rental car companies have decided to make the devices mandatory in all rentals, then it seems likely that there is not a sudden resurgence of device sales. Then there is the NTSB recommendation to get rid of electronic device use in cars, but Garmin is looking to get more in-dashboard auto sales ahead.
Perhaps investors have noticed that the 18 million shares in the most recent short interest data was the lowest that it had been for a year. Or maybe it is a dividend yield north of 4%. Maybe the excitement was a Garmin CFO interview on CNBC that is giving investors more comfort. In the middle of December, J.P. Morgan counted Garmin as a stock which should be absolutely avoided. Then there is the issue of LightSquared’s wireless network interference with most GPS devices.
The Garmin CFO and Treasurer interview can be seen here. Garmin shares are up at $39.40 after hitting a daily high of $39.53, and the prior 52-week trading range was $29.23 to $39.03.
JON C. OGG
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