Water-Logged And Getting Wetter Stock Of The Day: Garmin (GRMN)
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified Garmin (GRMN) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Garmin as such a stock due to the following factors:
- GRMN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.9 million.
- GRMN has traded 1.1 million shares today.
- GRMN traded in a range 284.7% of the normal price range with a price range of $2.60.
- GRMN traded below its daily resistance level (quality: 1 day, meaning that the stock is crossing a resistance level set by the last 1 calendar day. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.EXCLUSIVE OFFER: Get the inside scoop on opportunities in GRMN with the Ticky from Trade-Ideas. See the FREE profile for GRMN NOW at Trade-IdeasMore details on GRMN: Garmin Ltd. is a worldwide provider of navigation, communications and information devices, most of which are enabled by global positioning system (GPS) technology. The stock currently has a dividend yield of 4.1%. GRMN has a PE ratio of 16.3. Currently there are 5 analysts that rate Garmin a buy, 1 analyst rates it a sell, and 5 rate it a hold.The average volume for Garmin has been 1.3 million shares per day over the past 30 days. Garmin has a market cap of $8.6 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.72 and a short float of 13.1% with 14.81 days to cover. Shares are up 8.1% year to date as of the close of trading on Friday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Garmin as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.Highlights from the ratings report include:
- GRMN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, GRMN has a quick ratio of 1.92, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for GARMIN LTD is rather high; currently it is at 56.90%. Regardless of GRMN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GRMN's net profit margin of 24.76% significantly outperformed against the industry.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- GRMN, with its decline in revenue, underperformed when compared the industry average of 22.7%. Since the same quarter one year prior, revenues slightly dropped by 3.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- GARMIN LTD's earnings per share declined by 7.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, GARMIN LTD increased its bottom line by earning $2.77 versus $2.67 in the prior year. For the next year, the market is expecting a contraction of 13.4% in earnings ($2.40 versus $2.77).
- You can view the full Garmin Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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