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Posted for "Chuck Jensen" <cjensen@dts9000.com>:
re: Garmin. maybe Garmin is gnawings its arm off thinking about how some
competitor is making a dollar...so they spend 3 dollars to get 2 in
revenue.
That has worked well for companies like DeBeers, but is not a good strategy for a company that is publicly traded, widely held and has analysts and investors breathing down its neck. When executive compensation is tied to stock prices, and a penny or two miss in earnings, or an analyst downgrade can send the shares plunging 10% overnight, the decision makers become more focused on next quarter's bottom line rather than the benefits that will be reaped in 3 years by killing off all competition. That is the crux of my concern with Garmin. In a company with robust double digit growth in every market segment, when a division is flat, it sticks out like a sore thumb. If analysts start focusing on aviation as a drag on the company (whether the drag is real or perceived) and that perception starts affecting stock prices, there will be a lot of pressure to cut and run from the aviation market and Garmin may pull a Trimble.
All this is mere observations and speculations from someone who has no financial training or credentials and whose opinions may be considered biased because of his close affiliation with Chelton.
Happy Holidays,
Hamid
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