Garmin (GRMN)

[steve44]

Hi All,

Sorry if I missed this but I did not see a thread on this one so here are some notes.

I bought a few shares of Garmin 11-17 at 50.04. The stock dipped a little and it coming back today so I moved my stop up under it to 49 this morning. because I was not sure if this market will push Garmin up anymore so I raised the stop to prevent any major lose

When I bought , GRMN had 3 greens in Investools. The Green on the Moving Average was off the one year chart which shows a 30 Moving average.

Price was 50 - Target was 57 - MOS was 27..those are Investools numbers but they are generally pretty close to Justin's Excel numbers.

Of course, Garmin is one of the stocks Phil used as an example in his book.

The big 5 growth numbers are well over the 10% min as Phil suggested. A few months ago, Investools change their format so now they have Phil's 5 growth numbers all laid out real nice on their TREND page. Real quick now to click TREND and see the numbers for the last 10 years. Due to this format change, it appears Phil and Investools still have some type of working relationship to facilitate each others ideas. I got into Investools 2 or 3 years ago when the minimum investment was lower. I heard it costs $2000 to get started but not 100% sure of that. My annual renewal now is around $500 now but I think it is worth it. Anyway, I have not been to a Motivation seminar for about 2 years so does anyone know if Phil is still selling Investools at his seminars ?

Thanks

Steve

[Deac]

Hello Steve.

It looks like Garmin is missing at least one M, MOS. You calculated a MOS of 27, yet bought at 50. This is not a Rule#1 trade.:)

Yes, Phil is still promoting Investools at Success seminars.

[bean_counter]

I really love this company. I had some first hand experience with their products in a previous position with an aircraft parts supplier and they are "wonderful" regarding the quality, user friendliness, customer service and forward lean. The founder Dr. Kao is still calling the shots and seems to be a "rule #1" type CEO from what I can garner. There is an enormous growth potential for this industry as every mass produced automobile in the future is a potential candidate for one of its units, and I have had several people in the auto industry telling me that GPS units will be standard equipment in a few years for many models. That's the kind of growth potential that doesn't show up in the number crunching exercises or chart gazing.

Right now unfortunately the stock is way overpriced. Also the CEO recently filed to sell 5% of his shares which is a huge chunk. There is a fairly consistent history of inside selling with this company over the past year which does not make me feel particularly warm. Also no inside buying to speak of.

Right now it's a bit of a reach to bite off a big chunk but it's one I am keeping a close eye on.

[Terry]

I was taking a quick look at GRMN and running the #'s and need a second opinion.
I'm not sure if I should use the current (22) or an average (30) for the estimated future PE.
I don't want to have a MOS that is to high which would allow me to pay to much but at the same time I don't want a MOS that is so low, it never allows me to purchase for the appropriate price.
Any advice would be appreciated.

[poisontee]

Originally Posted by steve44

Hi All,

Sorry if I missed this but I did not see a thread on this one so here are some notes.

I bought a few shares of Garmin 11-17 at 50.04. The stock dipped a little and it coming back today so I moved my stop up under it to 49 this morning. because I was not sure if this market will push Garmin up anymore so I raised the stop to prevent any major lose

When I bought , GRMN had 3 greens in Investools. The Green on the Moving Average was off the one year chart which shows a 30 Moving average.

Price was 50 - Target was 57 - MOS was 27..those are Investools numbers but they are generally pretty close to Justin's Excel numbers.

Of course, Garmin is one of the stocks Phil used as an example in his book.

The big 5 growth numbers are well over the 10% min as Phil suggested. A few months ago, Investools change their format so now they have Phil's 5 growth numbers all laid out real nice on their TREND page. Real quick now to click TREND and see the numbers for the last 10 years. Due to this format change, it appears Phil and Investools still have some type of working relationship to facilitate each others ideas. I got into Investools 2 or 3 years ago when the minimum investment was lower. I heard it costs $2000 to get started but not 100% sure of that. My annual renewal now is around $500 now but I think it is worth it. Anyway, I have not been to a Motivation seminar for about 2 years so does anyone know if Phil is still selling Investools at his seminars ?

Thanks

Steve

Steve, with a Historic EPS of 25 and a PE of 20 my mos is 60 and its trading right at 60.

I see your MOS of 27. Are you being too conservertive or maybe I am the one who is doing this wrong?

Can member here please run your numbers and lets see what you all come up with.

Thank you gang

[Gunnski]

GRMN- My MOS is $33.52. Est. EPS Growth Rate 18%. Est. Future PE 20 (Historical Ave.). The PE could go to 30 (Ave. 5-Yr. Price Ratio) but, I took the lower number. Not on sale at this time. Current price is $60.09. FYI. Good investing!

[poisontee]

Originally Posted by Gunnski

GRMN- My MOS is $33.52. Est. EPS Growth Rate 18%. Est. Future PE 20 (Historical Ave.). The PE could go to 30 (Ave. 5-Yr. Price Ratio) but, I took the lower number. Not on sale at this time. Current price is $60.09. FYI. Good investing!

I see that you took the lowest EPS estimate from the analysts of 18. I took a higher number because looking at the Big 5 numbers, The least equity growth of the past 10 yrs is 28 %. Assuming this trend will go on( looks predictable) I used my estimated EPS grow of 25 which is not being very conservertive to get a MOS of 60. I think to be a true Rule # 1 investor I will go with your numbers here. I will wait for the company to go on sale. It's a prety good company and I like its 4 M's.

Thank you Gunniski for ur time.

What MOS do you get for COH?

[Gunnski]

Nice job! On GRMN I could go several ways. I selected conservative. I could use a Growth Rate of 35% or a ROE of 28.8. P/E is right around 29.2. You have options. I went low.

On COH. If I use MSN numbers I have an MOS of $30.43. If I use Morningstar numbers I have MOS @ $217.70. Currently priced @ $48.66.

Morningstar has ROE Ave. at 43%. I think that will be tough to maintain. I would select the Expert's earning est. @ 19.80. I have P/E's @ 25.5, 29.5 & 39.3.

COH has wonderful Free Cash Flow which is a good thing.

[poisontee]

Originally Posted by Gunnski

Nice job! On GRMN I could go several ways. I selected conservative. I could use a Growth Rate of 35% or a ROE of 28.8. P/E is right around 29.2. You have options. I went low.

On COH. If I use MSN numbers I have an MOS of $30.43. If I use Morningstar numbers I have MOS @ $217.70. Currently priced @ $48.66.

Morningstar has ROE Ave. at 43%. I think that will be tough to maintain. I would select the Expert's earning est. @ 19.80. I have P/E's @ 25.5, 29.5 & 39.3.

COH has wonderful Free Cash Flow which is a good thing.

Gunnski-
COH is a good company.The only concern i have is Insiders control 0.01% of COH through the 3,066,313 shares that they hold. This level of ownership is below the Textiles, Apparel and Luxury Goods industry norm and suggests that insiders goals could be less aligned with those of shareholders than at other companies in this industry. Plus, over the last 3 months insiders sold a net 14.6K shares. This is much lighter than the 2-year quarterly average and provides some indication that insiders are bullish about COH's prospects for the next 6-12 months.

What does such ownership make you think in the long run?

Tim

[Gunnski]

I am a big fan of the jockey. You bring up a great point re: Insider control or lack of it. Additionally you are correct this is a super business in a very good industry.

Jewelry/accessory has been on fire the last 5 yrs. COH is one of the strongest performers in the industry. COH has had great revenue & earnings growth the last three (3) years. As has the industry. I would prefer 10 years. My main concern is the quaility of its earning. There is to much disparity in its Price/Cash Flow (25.2) vs. its forward Price/Earnings ratio (7.1). Earnings quality is a big question for me. It should be closer. This may indicate some price distress, and lets not forget this is a young business.

I think that it is due for a rebound soon. Will it be a spike or true run up? The EMA 50 & 13 days are due for a positve crossover very soon. Strickly from viewing the charts.

I have Est. Sales Growth 19.8%. Est. EPS (5 yr.) 3.98. Ave. P/E Ratio 24. Annual Projected Return 14.5%. All good!

Take a look at AEO, ANF & URBN too.

I hope you can get this one on sale and it can continue it's growth rate!