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First Appears are a few of my favourite Insights to write down. They’re a possibility to seek out area of interest gamers I’ve by no means heard of or get underneath the hood of an enormous identify making its inventory market debut. Oftentimes, this implies I’ve little in the way in which of expectations. I don’t need my preliminary opinion to blind me to the fact of the information.
Nevertheless, I’m not excellent.
At the moment’s First Look will discover Garmin, an organization that I and the opposite analysts had written off as a relic of highway journeys previous. To me, Garmin makes the GPS that got here together with your rental automotive in 2007 or the golf watch your boss wears (Hello JT!). Its branding makes me yawn and elicits the identical quantity of pleasure as a pair of climbing boots or a bag of granola. It’s bland, and this blandness poisoned my ideas.
Seems, Garmin is sort of the right funding. Its highlights embody:
- A extremely diversified stream of income that has grown reliably over the past six years. In FY 2021, it was up 19% YoY reaching $4.98 billion.
- An astounding 24.5% working margin. A mind-blowing determine while you bear in mind it manufactures {hardware} and that is barely beneath the place it was in 2020 as a result of provide chain points and elevated transport bills.
- Vertical integration — want I say extra?
- Completely zero debt and $3.2 billion of money available. This explains why they’re so keen on inventory buybacks.
- And to prime all of it off, a 2.58% annual dividend, which is predicted to rise by 9% in 2022.
Merely gorgeous.
How does Garmin pull this off? Let’s break it down…
