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 $36.6 million.
  • GRMN has traded 515,619 shares today.
  • GRMN traded in a range 233.8% of the normal price range with a price range of $1.62.
  • GRMN traded above its daily resistance level (quality: 524 days, meaning that the stock is crossing a resistance level set by the last 524 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 4.4%. GRMN has a PE ratio of 18. Currently there are 2 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 781,700 shares per day over the past 30 days. Garmin has a market cap of $8.7 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.77 and a short float of 8.5% with 13.82 days to cover. Shares are up 24.8% year-to-date as of the close of trading on Tuesday.

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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 revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • GRMN's revenue growth has slightly outpaced the industry average of 2.9%. 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.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • The gross profit margin for GARMIN LTD is rather high; currently it is at 56.56%. 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 14.11% significantly outperformed against the industry.
  • 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 of 58.45%, GARMIN LTD is still growing at a significantly lower rate than the industry average of 152.48%.

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