Garmin Ltd. (NASDAQ:GRMN) has traded in a range for the better part of the year as it struggles to rise above its 52-week highs even after posting stellar quarterly earnings year-over year. The company has hammered expectations in each quarter as revenues continue to grow at a respectable rate. The stock, on the other hand, has refused to edge higher opting to sit squarely between the $46-$56 trading range.
Institutional Holding
Concerns over the stock performance with regards to the overall industry is already fueling skepticism among investors. Regulatory fillings indicate that Burrell Jonathan trimmed its stake in the company to 27.56 million shares from 27.79 million shares. Winton Group Ltd also trimmed its investment in the company by selling 69,757 shares. The firm currently controls 102,093 shares valued at $5.2 million
Waddell & Reed Financial Inc. owns 1.78 million shares of Garmin valued at $90.8 million. Another hedge fund with stakes in the company is Robeco Institutional Asset management valued at $76.33 million.
Garmin stock currently has a consensus rating of a “Hold” among thirteen analysts. Four investment firms rate the stock as a sell, six having issued a hold rating as three maintain a buy rating.
Fitness and Automotive Business Weakness
The Swiss maker of GPS products fitness trackers and infotainment systems operates in a highly competitive industry. The likes of Apple Inc. (NASDAQ:AAPL) and Samsung expanding their footprint into the Fitness tracking business appears to be fueling concerns about the company’s long term prospects.
Fitbit Inc. (NYSE:FIT) which is a major player in the wearable’s business has seen its market value drop by more than 70% over the past year as the entry of new players in the business continues to affect its prospects.
Strength in Garmin’s company’s aviation business has helped offset declines in the fitness and automotive businesses. However, weaknesses in the two core business should continue to fuel investors’ concerns given that declines on this front could significantly affect the company’s profit margins.
