Saturday, June 18, 2011

"Who can weather the storm in the tech sector and give you a good total return? I would look to Garmin LTD."

Dow Jones Industrial Average 12,004 (UP) Week ending June 17th  (NASDAQ continued down)

Tornado warnings in the Tech Sector
Well so far this weekend, I have heard about one person in the manufacturing sector who lost her job as buyer. She had been at the job for 40 years and her company is probably moving all the manufacturing outside the US, so that job is lost forever, not to be filled by a younger person in the US. Then I heard about someone who battled and battled to keep there house but finally threw in the towel, loosing all their equity in that house and walking away. This is a snapshot of USA , June 2011. How will we ever get unemployment down when we keep loosing more and more skilled and high paying jobs? We need to change our taxing policies and encourage businesses to stay in the US and new businesses to come to the US and build their factories right here.

The tech sector has been under siege for weeks
now, with Research in Motion, Juniper Networks, Micron, LG Display, Nokia, Seagate, Autodesk and others being vilified and their prices driven down. I guess everyone should just take their toys and go home and let Apple and Google own the whole tech world. I ..don't.. think... so!

One tech stock you can own is Garmin Ltd. (Symbol GRMN, $33.66).  First lets start with the 5.89% dividend  yield ($2.00 per share) that the stock pays.  Will they keep that dividend rate? You bettcha. They have a bulletproof balance sheet with Zero Long Term debt and have excellent controls on cost in place. The PE on the stock is 10.29. The product mix is being fine tuned and diversified so revenues and earnings have gone down a bit in the last four years, but the existing company is sound and moving forward into new businesses.

ForeRunner 610

You need to let go of the past. Garmin had most recent quarter EPS, GAAP earnings of .49 cents in the most recent quarter was over last years .19 GAAP earnings in the same quarter, and is up 157.89%. The 12 month total return on the stock is 18.1%. This is a dynamic company which will give you a nice total return and equity gains as new businesses develop.

 Talk about  efficiency. 52.90 % Gross profit margins and they turn their inventory 6.7 times a year.

Are there any road hazards around? Yes, keep an eye on the developments in the LightSquared 4G deployment and reported possible interference it causes to regular low power GPS systems. If there is one of those media hysterical behavior scares coming up,  there could be a big bargain day for GPS stocks. Keep on the lookout for it to buy in.

Also sift among the ruble in tech stocks and find some bargains like Skyworks Solutions (SWKS, $23.16) and Nokia Corp. ADR (NOK, $6.02).
         So find your way to Total Returns and even Go Fishing with Garmin ...... >>>>>>>

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