Why I Don’t Like Garmin Ltd. (GRMN): Apple Inc. (AAPL), Google Inc (GOOG)

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How is smart money trading Garmin Ltd. (NASDAQ:GRMN)?

The level of insider sales have well outpaced that of buys at Garmin, with the most recent buy being as far back as 2009, while a number of insiders sold throughout the second half of 2012 (see insider trading here). As far as the hedge fund activity, billionaires Ken Griffin of Citadel Advisors and Jim Simons of RenTech sold off their entire stakes of Garmin during the fourth quarter (check out all hedge fund activity).

Don’t be fooled

Smartphone adoption has been growing rapidly; too fast for Garmin to hedge the devices’ infringement on its GPS market. Garmin even tried launching a mobile phone of its own, but it failed to catch hold in the market. I think Garmin’s business model is in jeopardy. Even trying to branch off to into watches and other sport-specific gadgets has failed. It now has a PEG ratio 2.8, which is way too high (anything above a 2.0 is expensive) for a worthwhile investment.

The article Why I Don’t Like Garmin originally appeared on Fool.com and is written by Marshall Hargrave.

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