It hasn't been the best of weeks for Garmin
Is it time to give up on this Stock Advisor recommendation? I don't think so. Let's dig into that negativity. As for the insider selling, Friday's filing, which had the company's CEO unloading just 50,000 shares, should never have been headline fodder. It is part of a prearranged trading plan where an executive will have small chunks of shares sold off at regular intervals.
More often than not, these 10b5-1 plans are done in the spirit of portfolio diversification and to avoid the appearance of trading on nonpublic information. It is an automated process. If a chieftain really thought a stock was peaking, would he or she really commit to a drawn-out selling process? Of course not.
The analyst downgrades? Well, that's a different story. The pros at DA Davidson and Merrill Lynch feel that Garmin's price has gotten ahead of itself lately. Merrill Lynch expects Garmin to yield a little market share in light of the onslaught of competing products being rolled out later this year.
Is losing a modest slice of market share so deadly when the pie itself is growing so quickly? Not really. Even if Merrill Lynch is right and Garmin sheds 300 basis points of market share, it would still command more than half of all GPS unit sales.
And let's talk about that future. During this week's Consumer Electronics Show, Garmin is introducing the Nuvi 680. The portable system offers many of the stylish touchscreen and multimedia features as its predecessors, but it enhances them with online connectivity. Garmin is hooking up with Microsoft
Garmin isn't the only one making a move in this niche. Yahoo!
If I'm right, scooping up Garmin at 22 times forward earnings would be as easy as following Garmin's voice prompts to get you where you want to be.
Longtime Fool contributor Rick Munarriz bought himself a Garmin over the holidays, even though he claims to know the streets of South Florida inside out. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.