Trade-Ideas LLC identified

Garmin

(

GRMN

) as a "barbarian at the gate" (strong stocks crossing above resistance 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 $26.0 million.
  • GRMN has traded 130,982 shares today.
  • GRMN traded in a range 276.5% of the normal price range with a price range of $1.90.
  • GRMN traded above its daily resistance level (quality: 23 days, meaning that the stock is crossing a resistance level set by the last 23 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' 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 positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on GRMN:

Garmin Ltd., together with its subsidiaries, designs, develops, manufactures, markets, and distributes a range of navigation, communication, and information devices worldwide. It operates through five segments: Auto, Aviation, Marine, Outdoor, and Fitness. The stock currently has a dividend yield of 5%. GRMN has a PE ratio of 16. Currently there are 3 analysts that rate Garmin a buy, 1 analyst rates it a sell, and 7 rate it a hold.

The average volume for Garmin has been 1.1 million shares per day over the past 30 days. Garmin has a market cap of $7.8 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.73 and a short float of 9.1% with 15.91 days to cover. Shares are up 11.5% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Garmin as a

buy

. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Household Durables industry average. The net income increased by 31.9% when compared to the same quarter one year prior, rising from $66.79 million to $88.09 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.6%. Since the same quarter one year prior, revenues slightly increased by 6.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • 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 2.15, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Household Durables industry and the overall market on the basis of return on equity, GARMIN LTD has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Net operating cash flow has significantly increased by 58.45% to $129.39 million when compared to the same quarter last year. Despite an increase in cash flow, GARMIN LTD's cash flow growth rate is still lower than the industry average growth rate of 104.40%.

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