Making a Christmas List – Part II

I need to know where I am going by using a Garmin in the new Lexus LS that I am asking for. I don’t have GPS in any of the cars I own and I honestly don’t know why!

I feel that this technology is a necessity for every car on the road and have nothing but the best to say about the product after using it extensively in Hawaii (earlier this year). I found GPS to be very reliable while using a loaner car over the summer while venturing out to Pennsylvania for a friend’s wedding. I would have been lost without a Garmin and always feel so secure when traveling with the unit.

I find the products to be competitively priced for an ideal holiday gift.

Garmin (GRMN) is up about 900% since its debut as an IPO during the past seven years. The stock peaked earlier this year with a 1,126% gain since the IPO. It more than doubled in 2007 before consolidating during the current pullback towards the 200-day moving average.

Garmin took off in May 2007 after crossing the $60 level , successfully completing the $60-$100 run in less than three months.

Garmin was a stock I owned earlier this year and is one that I would not hesitate to buy again based on its leadership status but right now is not the right time based on pure technical analysis.

I am looking for a solid base formation at or near the 200-day moving average that could take months to develop (be patient). Look back and you can see that the stock traded sideways for many months before blasting to new highs in the second half of 2007. I can’t setup the proper risk/reward strategy until I can see a base and/or change in the current short term down-trending correction. I will watch and revisit this stock if and when the ideal buying opportunity presents itself.

Earnings Watch:
FY 2005: $1.37
FY 2006: $2.35
FY 2007: $3.55E (looking for a 51%+ increase over last year)
FY 2008: $4.36E
FY 2009: $4.99E

ROE: 43%
ROA: 42%
P/E: 29x
PEG: 1.47

Institutional Analysis:
Total Institutions: 585
Money Market: 306
Mutual Fund: 254
Other: 25

Shares Held: 117.86 mil
Shares Held Previous Period: 106.89 mil

Shares Bought: 24.09 mil
Shares Sold: 13.12 mil
Value of Shares Bought: $2.8 Bil
Value of Shares Sold: $1.5 Bil

Garmin (GRMN) Coverage on the blog:

• Should we Accumulate Shares?
  

  GRMN – 82.32, the former high flyer is down $40 as it approaches the 200-d m.a. for the first time since early 2007. A base here is a great accumulation opportunity.

• Tracking Garmin (GRMN)
• Indicators and Research Save me Money
  

  I saved the portfolio $4,000 in profits from my sales on Friday and Monday (GRMN and SLW).

• Support at the 200-day Moving Average
  

  GRMN – $49.69 -sitting on the 200-day moving average!

• Ten Stocks to Watch
  

  GRMN – $47.18 ($95.35) down over 2% for the week but the stock continues to hold the 50-d m.a. as support while maintaining a presence near the psychological triple digit threshold. I still like the stock in a rallying market (could make a nice option play for a solid run).

• MSW Market Overview
  

  Looking at the MSW Index, we see that every stock fell for the week, so which ones dropped the least?

  GRMN: -1.75%
  TS: -2.71%
  GRMN – $49.12 ($99.26), These were the only qualifying stocks from the MSW Index that fell less than the major indexes. Garmin (GRMN) fell less than every major market index and found support near $95 and the 50-day moving average. It did qualify for distribution, the first in 13 full weeks.

• Interesting Stocks with 15% of a New High
  

  GRMN – $31.88 ($64.42), flirting with the 50-d m.a. as the stock sits in the $60 range but is not a an official $60-$100 candidate until it can breakout above the recent peaks set at $70.07 and $68.88

Christmas List Series:

• Part I: My Lexus by Toyota Motor Corp (TM)

Next up in this 5-part Series:

• Part III: A New Suit from The Men’s Warehouse (MW)

Future Wish List Items:

• Part IV: A Video iPod from Apple (AAPL)
• Part V: A Blackberry Pearl from Research in Motion (RIMM), using the Verizon Wireless (VZ) Network

Making a Christmas List – Part I

It’s that time of year (Thanksgiving) when my family pulls names from a hat and then must buy a gift or gifts for the person they draw. We all add gadgets, toys, dreams and/or necessities to a large wish list that gets mailed back and forth prior to the turkey dinner.

So what’s on my wish list this year?

Let’s start big in Part I.
It’s probably not going to happen because this wish list gift exceeds the spending limit but I’ll ask for it anyway.

A BRAND new 2008 Lexus LS (How about that)!!!

Have you ever watched Entourage on HBO? If so, I’ll take Ari’s car. Outside of an Aston Martin DB9, this is the next car on my list. Luxury, style, quality and affordable!

I bought my first used Lexus in June 2002 when the stock was trading in the $40 range. Toyota Motor Corp. (TM) went on to make a 245% gain over the next four years as I added more than 100,000 miles to the car. I should have taken a car loan and placed the $10k into the stock which would have paid for everything and more with that gain. Unfortunately, I paid for the car in cash and never bought the stock.

I was sold for life over the past five years as I took that car close to 200,000 miles from 70k without a problem. The paint job on that ES300 still looks better than some new cars on the road today.

Based on the experience of my ES300 and my wife’s Jetta, we decided to be Lexus buyers for life. I gave my wife a “December to Remember” in January 2006 when we bought her a certified pre-owned Lexus. It has been every bit as amazing as the first used Lexus. She loves the car and can’t wait to look towards the SUV’s offered by Lexus when we start thinking about children.

Why buy used? I let the other guy or gal eat the depreciation. Why buy a $50,000 car when you can get it for $25k (and it holds its value better than most cars at this point)?

And that’s exactly what I did with my most recent purchase of a used Lexus GS 300. I much rather buy a used Lexus with a few years of wear and tear than a brand new junk box that sells for $25k as well.

Back to the stock:
Toyota (TM) recently violated the 40-week moving average (200-d moving average) which it has held as support over the past four years. Volume is increasing as the stock begins to stumble for the first time since I have been a proud owner of their products (and I will continue to buy from this exceptional company).

I would like to own the stock in a new longer term portfolio I am building for my family that trades more like a Peter Lynch fund with stricter sell rules. I am looking for a consolidation phase that will allow the stock to base before I will grab my first round of shares.

I don’t want to enter a position until the 10-week moving average crosses back above the 30-week moving average. I use this type of technical analysis from the studies of Victor Sperandeo and his four decades of experience on Wall Street.

The $70 to $80 trading area seems like an excellent accumulation area based on the range formed in 2004 and 2005. I can say if TM will fall this far but the first major basing pattern and moving average crossover will be my signal to enter.

Earnings:
5-Year Annual Growth: 27.44%
FY 2005: $6.66
FY 2006: $7.15
FY 2007: $8.55
FY 2008: $9.96E – a 16.49% increase
FY 2009: $10.86E

ROE: 15.48%

I’ll keep a close eye on the institutional sponsorship.

Institutional Analysis:
Total Institutions: 478
Money Market: 324
Mutual Fund: 137
Other: 17

Shares Held: 78.55 mil
Shares Held Previous Period: 74.63 mil

Shares Bought: 11.33 mil
Shares Sold: 7.4 mil
Value of Shares Bought: $1.3 Bil
Value of Shares Sold: $851.39 Mil

Next up in this 5-part Series:

• Part II: I need a Garmin (GRMN) for my Lexus!

Future Wish List Items:

• Part III: A New Suit from The Men’s Warehouse (MW)
• Part IV: A Video iPod from Apple (AAPL)
• Part V: A Blackberry Pearl from Research in Motion (RIMM), using the Verizon Wireless (VZ) Network