Filed under: Technical Analysis, Garmin Ltd (GRMN)

Recently, the Motley Fool ran an article that argued GPS maker Garmin Ltd. (NASDAQ: GRMN) is the “Best Stock for 2008.” While I’m not the biggest Garmin believer around, I’d like to use this post to explain the best entry point (in my opinion) for investors interested in initiating a position in this stock.

There are several risks surrounding Garmin at the present time. The most important risk to consider, in my opinion, is the potential for a weakening ‘momentum story’ in the stock. As Priya Ganapati outlined for TheStreet.com, weakening margins and slowing revenue growth are two potential risks facing the company. If the company does in fact report either of these circumstances has ‘come to fruit,’ I expect the stock to get a haircut.

However, there are still many bullish arguments behind the stock. The most rational of these, in my opinion, is the very reasonable multiple currently attached to the stock. As of now, the stock trades for roughly 21x forward analyst earnings. If the company does in fact deliver solid earnings results in coming quarters, I believe the stock is prime to rally.

Continue reading Don’t touch Garmin until the momentum returns

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This entry was posted on Thursday, January 3rd, 2008 at 10:36 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.