Navteq (NVT) and Garmin (GRMN) - Navigation Technology

Rather than recreate the wheel, I am going to link to a recent post from a blog I enjoy reading as his picks are very similar to mine. The blog entry is in regards to 2 stocks I have on my watch list, Navteq and Garmin - both deal with navigation technology in different ways. Navteq is more content (mapping), and Garmin is more hardware.

Stocks & Blogs blog entry: Navigation Technology Goes Mainstream. Buy Navteq and Garmin

In full disclosure, I bought GRMN in a personal account back in the spring on one of its pullbacks in the $50s - the stock did nothing; I got impatient and left the scene. Now look at it, over $100 last week. That doesn't feel too good. :)

Of the two, they both have potential 'issues', with GRMN there is always potential margin pressure as price pressure increases from competitors and potential raw product costs go up. So far they have handled it pretty well.

For NVT, which I am less familiar with, citing a Motley Fool article from early August, it appears that one of their customers bought a competitor: "Management remained mostly tight-lipped, opting not to speculate on how TomTom's planned acquisition of Navteq competitor Tele Atlas would affect the market in the future. While Navteq acknowledged that lost revenue from TomTom's business will have a meaningful impact in the second half of the year, CEO Judson Green stated that the deal will not fundamentally change how the company operates."

On the plus side, these 2 companies form a relative duopoly in the niche.

Due to the huge run up, I had not started a position in Garmin but did so recently in a very small way, while I am still evaluating NVT so no position there. Unfortunately, Garmin is also a Cramer favorite, which means its full of Cramer lemmings, always making the stock more of a madhouse.

No positions