GRMN: GRMN Oversold, Time to Buy is NOW

Garmin has fallen off significantly recently due to a number of concerns that are overly pessimistic. 1. Concerns about declining operating margins. If you look at the company's history, the operating margins have declined since 2003 and yet net income has continued to increase as a result of annual growth rates in excess of 50% each year. The trend of significant revenue growth should continue to offset the fractional decline in operating margins. 2. Also a concern is the fact that a device that will include all of the following: a phone, Internet access, and GPS will replace the personal navigation devices. However, this will not take place any time soon. How many cell phones today play MP3s? And yet, home many IPODs has Apple sold? In addition, GRMN is extending its reach into this market with the release of its Nuviphone product. If you believe the company will overcome these concerns, it's a definite buy. The company's forecasted revenue growth of about 40%, operating margin of 25%, and analysts' expectations of around $4.40 for earnings in 2008. If you take that $4.40 and multiple it by a conservative 15 P/E ratio you would get a price target of $66.00 which I believe it will achieve in the next 12 months.