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Summary: GPS giant Garmin's (NasdaqGS: GRMN - News) shares ($80) have rallied more than 150% since last February. Escalating car-GPS sales in the U.S. and Europe boosted revenue 73% to $1.77 billion in 2006, while EPS climbed a robust 64% to $2.35. Analysts expect EPS of $2.89/share in 2007, and $3.28 in 2008. Dougherty & Co. analyst Jeff Evanson notes that marine and aviation markets have yet-to-be tapped by GPS devices. He says Dutch rival TomTom is struggling to find footing in the U.S., where Garmin controls 50% of the market. He also notes that Garmin just recently began selling units through Wal-Mart (NYSE: WMT - News). Bearish analysts like Bank of America's Ron Tadross say share prices already reflect the company's growth prospects. He cedes that sales of portable navigation devices will continue to grow at a 110% annual clip, but worries about market share being usurped by other GPS players, and pre-installed car systems. Barron's is unimpressed by the opposition: Sony (NYSE: SNE - News) introduced an unimpressive unit last year, while Garmin continues to roll out cheaper mass-market units, and still caters the demand for innovation at the high-end. Despite record demand, the percentage of drivers who own GPS systems remains low. Evanson says shares could hit $93 over the coming year.
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Labels: Barron's, GRMN, SNE, WMT

Summary: Subprime-leery investors avoid financial/lending stocks lately, especially US-centric ones like Raymond James Financial (NYSE: RJF - News). But RJF has no subprime exposure, has recorded 20% higher net income and a 41% revenue increase in Q2 from rising deposits—not loans. Bank revenue should contribute $0.19/share in 2008 profits, up from a previously forecast $0.12/share, where $0.35/share is expected for 2009. Though RJFs $31 shares trade at a relatively expensive 13.5 P/E or 2.4 book value, that's offset by $3/share in cash and equity. That's roughly 11% of total assets vs. big brokers like Merrill Lynch (NYSE: MER - News) and UBS (NYSE: UBS - News) with just 3%. RJF should actually benefit from Wachovia's (NYSE: WB - News) buyout of rival A.G. Edwards (NYSE: AGE - News) as former AGE brokers go looking for better pay packages, taking their commissions with them. Operational streamlining has led RJFs 4,640 financial advisors to generate 40% more revenues/assets per advisor since 2004. Analysts have largely missed the $3.7 billion cap company's potential as the largest independent brokerage house. CEO Thomas James says RJFs not for sale, but bulls say the stock could reach $37-$38, or even $40 if the buyout price is right.
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Labels: AGE, Barron's, MER, RJF, UBS, WB