Please ensure Javascript is enabled for purposes of website accessibility

Why Garmin Stock Rose 11% in October

By Demitri Kalogeropoulos - Nov 4, 2019 at 9:24AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company beat expectations for third-quarter sales while raising its 2019 outlook.

What happened

Garmin (GRMN -3.20%) shares beat the market month as the stock gained 11% compared to a 2% increase in the S&P 500 index, according to S&P Global Market Intelligence. The rally added to solid returns for the tech stock's shareholders, who are up 50% so far in 2019.

A hiker interacts with her smartwatch.

Image source: Getty Images.

So what

Garmin pleased investors with a third-quarter earnings announcement late in the month that showed healthy momentum across its GPS device business. Popular consumer smartwatch releases combined with hit aviation and marine products to send sales higher by 15%. Profitability improved, too, leading to a 27% surge in adjusted earnings per share.

Now what

Garmin is on track to notch its third straight year of accelerating sales growth and improving operating margins following management's 2019 outlook upgrade in late October. That prediction relies on a solid holiday season outing and includes the negative impact of its slumping auto GPS device division.

However, the tech stock's success at diversifying away from these volatile segments has lessened the risk involved with this business, and investors are responding to that improving earnings profile by sending shares significantly higher this year.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Garmin Ltd. Stock Quote
Garmin Ltd.
GRMN
$101.20 (-3.20%) $-3.35

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
349%
 
S&P 500 Returns
122%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.