This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Crush the S&P With 5 Stocks Everyone Hates

Garmin

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Garmin (GRMN) is one of those stocks that seems crazy to go short against. The firm boasts huge profitability, no debt, more than $2.5 billion in cash and investments (paying for around 30% of its market cap right now) and a huge 4.3% dividend payout.

But shorts are betting that increasing competition in the GPS business will torpedo those stellar financials and send the stock sinking. That's why Garmin currently has a short interest ratio of 18.7, indicating that it would take almost a month for shorts to cover their bets.

>>4 Tech Stocks Set to Shine

It's true that consumer GPS devices aren't a very attractive business anymore. Units are becoming commoditized, margins are dropping, and other devices (such as cellular phones) are taking their place as navigators. But if anyone can shake the industry headwinds, it's Garmin. For starters, the firm still earns hefty margins on automotive GPS units, as well as an impressive share of other lucrative markets for GPS: Outdoors, boating and aviation are just a few. Ask any pilot who owns the navigation market in general aviation (or look at the firm's amazing $50,000 G1000 avionics suites), and Garmin is the clear winner.

Exposure to those other high profit, low volume markets enable Garmin to pour R&D into big-ticket electronics and then transition the tech to the more margin-sensitive consumer market. While the breakneck growth of consumer GPS is effectively over, Garmin's business model isn't.

3 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,079.57 -42.44 -0.25%
S&P 500 1,996.74 -3.38 -0.17%
NASDAQ 4,557.6950 -11.9260 -0.26%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs