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Garmin Ltd. (NASDAQ: GRMN) has undergone a rather large transformation. But when you think about its primary products, you cannot help but wonder how Garmin stock is becoming valuable again.
Money Morning's Andrew Keene takes us way back to primitive times, when we were all excited to have a GPS device in our cars. After years of unfolding large paper maps to find our way and then never being able to re-fold them to put away, a GPS device that plugged into your cigarette lighter was better than cavemen getting fire.
No more getting lost. No more fumbling around side streets when you had to detour. Plug in your destination, and the machine tells you how to get there.
Of course, since the portable GPS days, smart phones have evolved a multitude of functions, including navigation. Standalone GPS devices became nearly obsolete and overlooked.
Garmin used to have revenue of $3.5 billion, way back in 2008. Then came the Great Recession – and smart phones – and that was all she wrote. The Garmin stock tanked from $120 in September 2007 to a mere $17 in November 2008.
However, the company hung in there and figured out a way to stay alive. Garmin is back with some new tricks…
Garmin Stock Returns
In fact, by January of this year, Garmin stock clawed its way back to over $100 per share. Why? Because the company retooled and went after targeted niches.
First, it became the built-in GPS provider for cars. No longer a plug-in, Garmin became an accessory that the auto dealer sold. Their screens were bigger and they tied into the car's other systems as a turnkey product.
Next, in 2015, the company went into smart watches, specifically focused on fitness and outdoor activity. That included marathon runners and hikers.
The strategy worked, even in a tight market competing with the Apple smartwatch. Andrew reported that more than 70% of data uploads at major marathons came from this company's watches.
Garmin is like the "Jell-O" of the early GPS market. Everyone called their devices a "Garmin," just like everyone calls tissues, "Kleenex."
Andrew has been watching it make its comeback, and now shares are ready to reflect its growth. Any company that can adapt is likely to come out on top, and Garmin sure has proven that.
The stock trades around $98, which is a little pricey right now given the market as a whole is a bit overbought as it comes out of its September correction.
Andrew is waiting for a pullback to buy. Just be aware that the $90-$91.50 area is important support, so keep an eye on that as a potential stop loss.
Three Stocks Even Better Than GRMN
Chief Investment Strategist Shah Gilani just held his first-ever stock-picking lightning round event – running through more than 50 stocks to tell you if they are stocks to buy or stocks to sell.
Dozens are overpriced and overhyped – you should ditch them ASAP.
But Shah says THESE three stocks are "screaming buys."
All three are trading at a discount… they're under-the-radar companies most people haven't even heard of… and they have massive tailwinds ready to send their share prices into the stratosphere.
To get the company names, tickers, and price targets for Shah's picks, go here now.