A feature that I want to provide here on Grow Your Funds is a story stock writeup. I will focus on a stock in the news, either positively or negatively, and take an in-depth look into why the company is in the news and what is going on at the company. It will be my policy to stay away from writing about any stocks that I own in my investment portfolio.
The first stock I am featuring is Garmin, or GRMN. Garmin is a company that provides GPS navigational tools, primarily in the consumer markets. GRMN has been in the news the past couple of days because of its tremendous earnings report. Yesterday GRMN reported earnings of 98 cents per share in the 2nd quarter, versus analysts estimates of 74 cents per share. The company earned only 56 cents in the 2nd quarter last year.
How did Garmin do so well in the quarter? Garmin has developed a very strong 
brand name in the GPS market. Garmin commands over 50% market share in the consumer GPS navigational devices market. In its earnings report yesterday the company stated that automobile and mobile segment revenue increased 99% year over year, and marine segment revenue increased 59%. GRMN also announced a large increase in the dividend it will pay out to shareholders, which the company is able to do because of its pristine balance sheet. The company has $573 million in cash on hand, and a paltry $223,000 in total debt.
Will the company be able to keep up its great growth? I certainly wouldn't want to bet against the company or the stock. The stock has had a great run and it could be argued that it is currently overbought, but the profit growth at GRMN should keep the stock price from dropping very much. The company has developed the best and most trusted products in a fast growing industry, and the future appears bright.
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